Poverty-efficient programme reforms with heterogeneous agents: the role of targeting and allocation rules

We use the Duclos, Makdissi and Wodon (2005) decomposition of programme dominance into targeting dominance and allocation dominance curves to identify poverty-reducing programme reforms. In particular we recognise the importance of considering more than one dimension when identifying poverty-reducing policy reforms. For this purpose, we use sequential stochastic dominance methods to analyse the poverty impact of policy programme reforms, particularly the case of income transfers and commodity taxation.