The Subsidy Dependence Index and Recent Attempts to Adjust it

Publication Date: Feb 1999
Published by: Microfinance.com
Document Type: Paper

View this Document   Email this Document

Are there alternatives to the SDI?

The SDI measures the social cost of subsidised Development Finance Institutions (DFIs.). The purpose of the measurement of social cost is not to purge subsidies but rather to help donors and governments to make informed choices about the best way to spend scarce public funds earmarked to help the poor. Disciplined use of the SDI cannot but help to improve how funds are spent. There have been three attempts to adjust the SDI - Khandker; Sacay; Hulme and Mosley; - and for all of them what is good is not new and what is new is not good.