Friday, 15th March 2019
The challenge of targeting extreme poverty: Evidence from Bangladesh
State capacity and accountability are notoriously weak in many developing countries. Anti-poverty transfers are therefore often mistargeted and inefficient. To improve our understanding of the underlying factors causing ineffective implementation of social policies, we examine primary survey data from 1296 elderly individuals in the target group of a social welfare scheme and 87 local government officials in charge of selecting beneficiaries. We further use a lab-in-the-field experiment to uncover hidden traits and preferences of the local government officials in charge. Focusing on cash transfers for elderly poor, we show empirically that the selection of beneficiaries is virtually orthogonal to the national government's eligibility criteria. Eligibility criteria are either ignored or compensated for by other opposing considerations. Further, illegitimate factors such as a personal connection to local government officials play a role for access to social transfers. Our study provides evidence on relevant factors explaining the discrepancy between national policy formulation and local policy implementation that can feed into the future design of interventions aimed at improving the effectiveness of social policies.