Information Asymmetry and Social Transfer Policies in Nigeria
Information asymmetry arises when economic agents are not all equally informed. In the policy-making process, economic agents involved consist of policy-makers and policy-targeted people, which are drawn from government and her citizens, respectively. The success and efficiency of policy efforts to redistribute income through social transfer schemes, in form of improving the lives of the poor and the unemployed, is conditional upon how informed these agents are. The paper uses a theoretical approach hinged on a policy-making framework to analyse why policies intended to bridge the welfare gap between the poor and the rich, as well as the gap between the employed and the unemployed, might be difficult to achieve and its outcome undermined unless all are well informed. This paper specifically predicts, under conditions of information asymmetry, the possible outcome of stipends proposal for the unemployed and the poor and suggests ways to make the intentions of the policy work better, using a better channel designed in a more reliable direction. Finally, we propose that this economy needs to go into a data-based economic environment where essential informational statuses of all are readily available to policy-making agencies for optimal income redistribution policies and efficient social transfer schemes.
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