Macro, Fiscal and Decentralization Options to Address Marginality and Reach the Extremely Poor

Abstract

Reaching the extremely poor and marginal groups in countries where local politicians and offi cials have little incentive to provide for them is a challenge to addressing marginality in many countries. Financial and taxation arrangements, information constraints, and institutional aspects between central and local governments to address these challenges are identifi ed in this chapter. The instruments that might be involved include a range of options, from transfers or assistance from higher levels of government (donors), cash support, or the provision of public services (particularly health care and education), other forms of income or employment support, to assistance for small-scale enterprises. In this chapter the author concludes that in the absence of genuine local interest in providing for the marginalized and extremely poor, direct provision of funding by central governments and aid agencies appears to be the main feasible option.