PECUNIARY REDISTRIBUTION THROUGH IN-KIND PROGRAMS

The pecuniary effects of cash and in-kind programs differ. A program t hat builds housing for the poor, for example, is likely to result in a lower price of existing low-income housing than would an equally cost ly cash transfer program. Low-income renters in general would benefit; landlords would lose. This paper argues that these pecuniary effects provide a previously unstudied rationale for the use of in-kind progra ms. Specifically, in a world in which the government has limited abili ty to target taxation, the pecuniary effects of in-kind programs may b e used to transfer rents from one group in society to another. The pro s and cons of using in-kind programs in this way are identified and ex amples from the real world are discussed.