Should the provision of social welfare be universal or means-tested? For many people, this question may seem easy to answer and the reason clear for all to see. To many, welfare should be means-tested, because benefits should not be given to people who do not need them, that is, the rich and the well-off. According to this view, welfare should only be given to people who need them most, that is, the poor and the needy. Means-testing costs less in public resources and wastes less. For a given budget, universalism means less for the poor, while means-testing entails more for the poor. It appears that the case for means-testing is simple and cogent.
If the matter is really simple and clear-cut, then it is puzzling that, in a 2010 report, the United Nations Research Institute for Social Development advocated universalism for combating poverty and inequality.
What has been mistaken then?
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