An important insight from this stream of research is that numerous distortions exist at any time in a given country, and that some are more important than others Moreover, as posited in the theory of the second best, it can actually be welfare reducing to institute reforms that remove some distortions as long as other distortions remain, which is the case in all real economies 13 Targeting the distortion associated with the biggest multiplier and therefore the largest direct welfare impact, is a good alternative since the second best effects are typically hard to estimate with accuracy. Other options include targeting all distortions