Progress for the Poor PDF
Preview Progress for the Poor
PROGRESS FOR THE POOR This page intentionally left blank Progress for the Poor LANE KENWORTHY 1 3 GreatClarendonStreet,Oxfordox26dp OxfordUniversityPressisadepartmentoftheUniversityofOxford. ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship, andeducationbypublishingworldwidein Oxford NewYork Auckland CapeTown DaresSalaam HongKong Karachi KualaLumpur Madrid Melbourne MexicoCity Nairobi NewDelhi Shanghai Taipei Toronto Withofficesin Argentina Austria Brazil Chile CzechRepublic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore SouthKorea Switzerland Thailand Turkey Ukraine Vietnam OxfordisaregisteredtrademarkofOxfordUniversityPress intheUKandincertainothercountries PublishedintheUnitedStates byOxfordUniversityPressInc.,NewYork #LaneKenworthy2011 Themoralrightsoftheauthorhavebeenasserted DatabaserightOxfordUniversityPress(maker) Firstpublished2011 Allrightsreserved.Nopartofthispublicationmaybereproduced, storedinaretrievalsystem,ortransmitted,inanyformorbyanymeans, withoutthepriorpermissioninwritingofOxfordUniversityPress, orasexpresslypermittedbylaw,orundertermsagreedwiththeappropriate reprographicsrightsorganization.Enquiriesconcerningreproduction outsidethescopeoftheaboveshouldbesenttotheRightsDepartment, OxfordUniversityPress,attheaddressabove Youmustnotcirculatethisbookinanyotherbindingorcover andyoumustimposethesameconditiononanyacquirer BritishLibraryCataloguinginPublicationData Dataavailable LibraryofCongressCataloginginPublicationData Dataavailable TypesetbySPIPublisherServices,Pondicherry,India PrintedinGreatBritain onacid-freepaperby MPGBooksGroup,BodminandKing’sLynn ISBN 978–0–19–959152–7 1 3 5 7 9 10 8 6 4 2 For Alex Hicks, Leon Lindberg, Joel Rogers, Wolfgang Streeck, Jeff Weintraub, and Erik Wright—generous teachers and mentors, sterling exemplars This page intentionally left blank Contents 1. RaisetheFloor 1 2. GrowthIsGoodforthePoor,IfSocialPolicyPassesItOn 5 3. HowTrickleDownCanFail:TheU.S.Case LaneKenworthyandKeithBentele 19 4. GenerousSocialPolicyReducesMaterialDeprivation LaneKenworthy,JessicaEpstein,andDanielDuerr 33 5. LowWagesNeedNotMeanLowIncomes 39 6. TargetingMayNotBeSoBad 53 7. PublicServicesAreanImportantAntipovertyTool 63 8. TheTaxMixMattersLessThanWeThought 71 9. TheAimIsNotSpendingPerSe 89 10. Tradeoffs? 95 11. ThePoliticsofHelpingthePoor 103 Acknowledgments 111 Appendix:DataDefinitionsandSources 113 Notes 119 References 131 Index 155 This page intentionally left blank 1 Raise the Floor Oneoftheprincipalgoalsofantipovertyeffortsshouldbetoimprove theabsolutelivingstandardsoftheleastwell-off.Myaiminthisbook istoenhanceourunderstandingofhowtodothat. ABSOLUTE IMPROVEMENT Improvement in absolute living standards has several components, each of which is contentious. Begin with absolute improvement. The inspiration comes in part from John Rawls. In A Theory of Justice,Rawlsaskswhatdistributionofincomeandwealthisfairest.1 Because luck plays a large role in determining our abilities, prefer- ences,motivations,andcircumstances,Rawlsconcludesthatanequal distributionisfairest.Heargues,however,that arise ininequalityis acceptable if it is to the absolute benefit of the least well-off. In this way, Rawls attaches substantial ethical weight to absolute improve- mentforthepoor.Inmyviewheisrighttodoso.2 Whyisimprovementimportant?Experimentalresearchhasfound that many people believe justice entails a floor for living standards, below which no one should fall, but not necessarily a rising floor.3 I don’t think policy makers should share this view. In a rich and growingeconomy,itisdifficulttojustifystagnantlivingstandardsfor those at the bottom. As an economy grows, our view about the appropriate floor will tend to be revised upward. This suggests that we favor not simply a satisfactory level of living standards for the poor,butimprovementovertime. An additional reason for favoring rising living standards comes from Benjamin Friedman’s argument about psychological impact of
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