Back to Basics

The problem with subsidies is that the rich enjoy them as much as the poor. The cross subsidy on diesel is a classic example.
Owners of fuel guzzling sports utility vehicles enjoy a significant portion of the subsidy.rn

rnMoney spent on subsidies and free services like water and education are often enjoyed by the richest quintile of the population and rarely by the poor.rn

rnStill governments progressively increase funds for subsidies and handouts.rn

rnAn economist from the World Bank said the less privileged not benefiting from government hand outs has nothing to do with the amount spent.rn

rnWorld Bank studies show the link between public money spent and service delivery outcomes are weak.rn

rnldblquote The link is extremely weak,
dblquote Shantayanan Devarajan, Chief Economist/South Asia, World Bank said speaking to members of the Economists Association in Colombo.rn

rnHe added that poor people dont get the full benefit of public services because they are not designed to effectively ser