ALTRUISM, THE SAMARITANS DILEMMA, AND GOVERNMENT TRANSFER POLICY

This paper shows that altruism provides an efficiency rationale for pu blic provision of insurance to the poor The framework is one in which there are rich altruists and risk-averse poor who face some possibilit y of loss, The government represents the rich and makes transfers on t heir behalf. With unconditional transfers the poor may forgo insurance and rely on private charity to bail them out in the event of-loss, Th is reliance on private charity has adverse efficiency effects. These m ay be avoided if the government makes in-kind transfers of insurance.