The authors have developed a dynamic computable general equilibrium model that provides a laboratory for investigating the potential impact of various policy instruments and programs intended to improve the relative and absolute incomes of the poor. The model is rooted in an actual economy--that of the Republic of Korea. From their results, the authors conclude that policy instruments in current use are largely ineffective when used singly because the effects of even substantial governmental intervention are quickly dissipated over time, with few of the hoped for trickle-down effects. However, their results also show that if a government chooses to make anti-poverty policy the major focus of its development strategy and uses a coordinated package of diverse instruments that affect a large part of total economic activity, it can do much to reduce poverty and inequality. Such coordinated packages are feasible within the existing economic structure, though they have a major impact on the relative position of different socioeconomic groups and hence on the balance of political power within the country.