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Decentralizing Eligibility For A Federal Antipoverty Program, Martin Ravallion
Decentralizing Eligibility For A Federal Antipoverty Program, Martin Ravallion
Martin Ravallion
In theory, the informational advantage of decentralizing the eligibility criteria for a federal antipoverty program could come at a large cost to the program’s performance in reaching the poor nationally. Whether this happens in practice depends on the size of the local income effect on the eligibility cut-offs. China’s Di Bao program provides a case study. Poorer municipalities are found to adopt systematically lower thresholds—roughly negating inter-city differences in need for the program and generating considerable horizontal inequity, whereby poor families in rich cities fare better. The income effect is not strong enough to undermine the program’s overall poverty impact; …
How Relevant Is Targeting To The Success Of An Antipoverty Program?, Martin Ravallion
How Relevant Is Targeting To The Success Of An Antipoverty Program?, Martin Ravallion
Martin Ravallion
Policy-oriented discussions often assume that “better targeting” implies larger impacts on poverty or more cost-effective interventions for fighting poverty. The literature on the economics of targeting warns against that assumption, but evidence has been scarce, and the lessons from the literature have often been ignored by practitioners. The paper shows that standard measures of targeting performance are uninformative, or even deceptive, about the impacts on poverty, and cost-effectiveness in reducing poverty, of a large cash transfer program in China. The results suggest that in program design and evaluation, it would be better to focus directly on the program’s outcomes for …