National pro-poor spending programmes and their effect on income inequality and poverty: Evidence from Vietnam

Authors

Van Phuc Phan, University of WollongongFollow
Martin J. O'Brien, University of WollongongFollow
Silvia Mendolia, University of WollongongFollow
Alfredo R. Paloyo, University of WollongongFollow

RIS ID

113390

Publication Details

Van Phan, P., O'Brien, M., Mendolia, S. & Paloyo, A. (2017). National pro-poor spending programmes and their effect on income inequality and poverty: Evidence from Vietnam. Applied Economics, 49 (55), 1-12.

Abstract

This article examines the causal effects of the national (pro-poor) targeted programmes (NTPs) on both poverty incidence and inequality in Vietnam over the period 2002¿2010. While the links between NTPs and poverty alleviation and income inequality have previously been analysed independently, this study is the first to offer a comprehensive analysis of NTPs expenditure on poverty and inequality simultaneously. Applying the system generalized method of moments estimator to a panel of Vietnamese regional data, we are unable to establish that NTPs have significantly mitigated poverty incidence. However, we estimate that NTPs have significantly increased inequality. We offer possible explanations why the NTPs have resulted in these unintended outcomes and discuss potential policies which can reduce both poverty and inequality.