Protecting the Vulnerable

In a risky world should governments provide public goods that reduce risk or compensate the victims of bad outcomes through social insurance? This article examines a basic question in designing social protection policies: how should a government allocate a fixed budget between these two activities?...

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Bibliographic Details
Main Authors:	Devarajan, Shantayanan, Jack, William
Format:	Journal Article
Published:	World Bank 2012
Subjects:	crowding ECONOMIC REVIEW expenditures insurance market low income medical care private insurance Public Insurance public insurance scheme social insurance
Online Access:	http://hdl.handle.net/10986/4447

id	okr-10986-4447
recordtype	oai_dc
spelling	okr-10986-44472021-04-23T14:02:17Z Protecting the Vulnerable Devarajan, Shantayanan Jack, William crowding ECONOMIC REVIEW expenditures insurance market low income medical care private insurance Public Insurance public insurance scheme social insurance In a risky world should governments provide public goods that reduce risk or compensate the victims of bad outcomes through social insurance? This article examines a basic question in designing social protection policies: how should a government allocate a fixed budget between these two activities? In the presence of income and risk heterogeneities a simple public insurance scheme that pays a fixed benefit to all households that suffer a negative shock is an effective redistributional instrument of public policy. This is true even when a well functioning private insurance market exists, and so the role of public insurance is not to correct a market failure. In fact, the existence of a private insurance market means that the public system has desirable targeting properties—all but the poor and high-risk take up private insurance. The provision of public goods that reduce risk for all should therefore be complemented with public insurance that (automatically) benefits those who are especially vulnerable. 2012-03-30T07:12:35Z 2012-03-30T07:12:35Z 2007-01-30 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/4447 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank World Bank Journal Article South Asia East Asia and Pacific Latin America & Caribbean Indonesia Dominica
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	crowding ECONOMIC REVIEW expenditures insurance market low income medical care private insurance Public Insurance public insurance scheme social insurance
spellingShingle	crowding ECONOMIC REVIEW expenditures insurance market low income medical care private insurance Public Insurance public insurance scheme social insurance Devarajan, Shantayanan Jack, William Protecting the Vulnerable
geographic_facet	South Asia East Asia and Pacific Latin America & Caribbean Indonesia Dominica
description	In a risky world should governments provide public goods that reduce risk or compensate the victims of bad outcomes through social insurance? This article examines a basic question in designing social protection policies: how should a government allocate a fixed budget between these two activities? In the presence of income and risk heterogeneities a simple public insurance scheme that pays a fixed benefit to all households that suffer a negative shock is an effective redistributional instrument of public policy. This is true even when a well functioning private insurance market exists, and so the role of public insurance is not to correct a market failure. In fact, the existence of a private insurance market means that the public system has desirable targeting properties—all but the poor and high-risk take up private insurance. The provision of public goods that reduce risk for all should therefore be complemented with public insurance that (automatically) benefits those who are especially vulnerable.
format	Journal Article
author	Devarajan, Shantayanan Jack, William
author_facet	Devarajan, Shantayanan Jack, William
author_sort	Devarajan, Shantayanan
title	Protecting the Vulnerable
title_short	Protecting the Vulnerable
title_full	Protecting the Vulnerable
title_fullStr	Protecting the Vulnerable
title_full_unstemmed	Protecting the Vulnerable
title_sort	protecting the vulnerable
publisher	World Bank
publishDate	2012
url	http://hdl.handle.net/10986/4447
_version_	1764391409295556608

Protecting the Vulnerable

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