Background
Targeting in economics and public policy refers to the allocation of benefits based on specific criteria. These benefits may be provided either in the form of cash or in kind.
Historical Context
Historically, targeting has been utilized in various forms of economic and social policies to ensure that resources are efficiently allocated to those who need them the most. The practice became more prominent with the advent of modern welfare states.
Definitions and Concepts
Targeting involves identifying a specific group of people based on particular characteristics, and then tailoring benefits to meet their needs. Examples include child benefits for low-income families or subsidized health services for the elderly.
Major Analytical Frameworks
Classical Economics
Classical economists might argue that targeting disrupts the natural allocation of resources as per market conduits and may create inefficiencies.
Neoclassical Economics
Neoclassical frameworks focus on the efficiency of allocation, analyzing how well-targeting measures minimize waste and maximize utility for the selected group.
Keynesian Economics
Keynesians may support targeting as a tool for ensuring equitable distribution of resources during times of economic distress, such as through unemployment benefits during a recession.
Marxian Economics
Marxian economists would critique targeting as a temporary fix that fails to address the underlying capitalist inequalities.
Institutional Economics
From an institutional perspective, the effectiveness of targeting depends highly on the administrative capacities and institutional frameworks within a society.
Behavioral Economics
Behavioral economists might explore how perceptions and behaviors of recipients and non-recipients are shaped by targeting policies.
Post-Keynesian Economics
Post-Keynesians would scrutinize the longer-term effects of targeting policies on aggregate demand and social stability.
Austrian Economics
Austrians often critique targeting for being a form of state intervention that disturbs spontaneous economic order.
Development Economics
Targeting becomes crucial in development economics for effectively directing resources toward poverty alleviation and improving health and education outcomes in underdeveloped regions.
Monetarism
Monetarists might examine how targeting affects inflation and governmental spending, proposing cautious use to avoid economic distortions.
Comparative Analysis
Different countries apply targeting in varying ways, from means-tested social programs in the UK to food stamp programs in the United States.
Case Studies
Case Study: UK Child Benefit
Provides benefits to low-income families with children under 16 to alleviate poverty and promote child development.
Case Study: US Supplemental Nutrition Assistance Program (SNAP)
Targets low-income individuals and families to assist with food purchases.
Suggested Books for Further Studies
- “Targeting Investments in Children” by Phillip B. Levine and David J. Zimmerman
- “Public Finance and Public Policy” by Jonathan Gruber
Related Terms with Definitions
Means-tested Programs: Social benefits provided to individuals whose income and assets fall below specified levels.
Universal Benefits: Benefits provided to all individuals regardless of income or circumstances.
Welfare Economics: Branch of economics that focuses on the well-being and welfare of individuals in an economy.
Social Safety Net: Various programs intended to provide support and financial aid to individuals in need.
Subsidies: Financial assistance granted by the government to promote economic and social policies.
By comprehensively deploying targeting techniques, policymakers strive to achieve efficient and equitable outcomes within the constraints of available resources.
