Two errors of targeting

Abstract

Abstract The authors analyse the relationship between two errors which commonly arise in the attempt to ‘target’ government expenditures on poor people: ‘E‐mistakes’ in which benefits are provided to the non‐poor as well as the poor, and ‘F‐mistakes’ in which some of the poor fall outside the scope of the programme. Existing redistributive programmes are examined in order to determine the right balance between the two types of error, and the conclusion is reached that in a majority of cases universal‐benefit programmes dominate programmes of precisely targeted support.