Targeted antipoverty programs

A cruel irony

Poorer countries are less effective in reaching their poor. For example, the following graph gives the coverage of social safety nets across countries, from poorest to richest, based on household surveys that identified direct beneficiaries for each of over 100 countries spanning 1998-2012.  (Safety net spending includes social insurance and social assistance, including workfare programs.) Richer countries tend to be markedly better at covering their poor, although the bulk of this is explained by differences in the overall coverage rate.

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Social safety net coverage rates for poorest quintile (poorest 20% ranked by household income per person) from the World Bank’s ASPIRE site.  The data are available for 109 countries; the latest available year is used when more than one survey is available. GDP from World Development Indicators.

This page provides some extra material and links on some of the largest direct interventions against poverty found in the developing world.

Right to work?

An evaluation of India’s National Rural Employment Guarantee Act (NREGA): Right to Work?

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Workers in Bihar digging an irrigation trench under the NREGA.

BREGS movie scene with women

Above is a screen shot from NREGA: The Movie, a randomized information intervention that was used to teach poor people in Bihar their rights under the law that created the scheme and the administrative process for acting upon those rights. If you would like to see the full (20 min) movie, in Hindi, you will find it on the sub-page: NREGA: The Movie. For an analysis of the impact of the movie see Ravallion et al., “Empowering Poor People through Public Information.

This type of information intervention—“edutainment” as Eliana La Ferrara dubs it in her paper “Mass Media and Social Change”—can also be revealing about the the processes of knowledge diffusion, as demonstrated in “Social Frictions to Knowledge Sharing” by Alik-Lagrange and Ravallion.  They find that the knowledge diffusion process is far weaker for disadvantaged groups, defined in terms of caste, landholding, literacy, or consumption poverty.

Fighting poverty in China

China’s urban Di Bao program: Is it really a poverty trap? On paper, “yes.” But not in practice thanks to local implementation. Benefit incidence Di Bao

The Southwest China Poverty Reduction Project: Still one of the few (only?) long-term evaluations of the impact of a poor-area development project in a developing country: Lasting impacts of aid to poor areas

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Plastic mulch being used to conserve water and suppress weeds for enhancing crop yields in poor areas of SW China as part of the SWPRP.

A Poor means test? Econometric targeting in Africa

Proxy-means testing has emerged as a popular method of poverty targeting with imperfect information. In a now widely-used version, a regression for log consumption calibrates a proxy-means test score based on chosen covariates, which is then implemented for targeting out-of-sample.

A new paper, poor-means-test, studies the performance of various proxy-means testing methods using data for nine African countries. Standard proxy-means testing helps filter out the nonpoor, but excludes many poor people, thus diminishing the impact on poverty. Some methodological changes perform better, with a poverty-quantile method dominating in most cases. Even so, either a basic-income scheme or transfers using a simple demographic scorecard are found to do as well, or almost as well, in reducing poverty.

However, even with a budget sufficient to eliminate poverty with full information, none of these targeting methods brings the poverty rate below about three-quarters of its initial value. The prevailing methods are particularly deficient in reaching the poorest. We should strive for something better.

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