Community-based welfare targeting and political elite capture: Evidence from rural China

Using nationally representative rural household survey data from the 2013 China Household Income Project (CHIP) and decomposable targeting differential measures, this article systematically evaluates rural Dibao’s targeting performance based on both income and multidimensional poverty measures, and investigates the effects of political elite capture in its community-based targeting (CBT) implementation. We found that rural Dibao’s targeting performance was quite poor based on income poverty standards. When based on multidimensional poverty, Dibao’s targeting performance was better than based on income poverty. Dibao’s intra-village targeting accounted for more of its targeting performance than inter-village targeting. We also found political elite capture effects to exist for both Dibao participation and transfer value received. Moreover, the political elite capture effect from close relatives was larger in magnitude than that from household members. Having a household member being a village leader in the village of residence had no significant elite capture effect, whereas having members with a political leader position outside the village of residence or being a non-leader political party member was associated with a greater chance of welfare participation. These findings suggest that targeting errors in developing countries’ CBT welfare programs such as China’s rural Dibao is still substantial and political elite capture may be one important reason for them.