Redistributing Smarter: Self-Selection, Targeting and Non-Conventional Policy Instruments

Abstract

La theorie moderne d’economie publique souligne que l’information imparfaite est la contrainte ultime auxpolitiques de redistribution car les necessiteux sont difficiles a identifier. De facon a cibler les transfertsefficacement, le systeme standard de taxe-transfert qui repose sur les declarations individuelles a besoind’etre complete par d’autres moyens visant a separer les necessiteux des non-necessisteux. Parmi ces moyens,on compte l’utilisation de transferts en nature, de controles de prix et de quantite de meme que des controlespar les administrateurs du bien-etre. Nous resumons le role de ces moyens en tant que partie integrante del’ensemble des politiques de redistribution et leurs implications potentielles pour la rationalisation du sys-teme de transfert canadien.Modern public economic theory emphasizes imperfect information as the ultimate constraint on redistribu-tion policy: the needy are hard to identify. To target transfers efficiently, the standard tax-transfer systemwith its reliance on self-reporting needs to be supplemented by other devices designed to separate the needyfrom the non-needy. These include the use of in-kind transfers, quantity and price controls, and monitoringby welfare administrators. The role of such devices as part of the mix of redistribution policies and theirpotential implications for rationalizing the Canadian transfer system are summarized.