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Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia

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Author Info

  • Cameron, Lisa A.

    ()
    (Monash University)

  • Shah, Manisha

    ()
    (University of California, Los Angeles)

Abstract

Cash transfer programs can provide important financial support for poor households in developing countries and are becoming increasingly common. However the potential for mistargeting of program funds is high. This paper focuses on the social consequences arising from misallocation of resources in close knit communities. We find that the mistargeting of a cash transfer program in Indonesia is significantly associated with increases in crime and declines in social capital within communities. Hence poorly administered transfer programs have a potentially large negative downside that extends beyond the pure financial costs that have been the focus of the literature to date.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6736.

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Length: 47 pages
Date of creation: Jul 2012
Date of revision:
Publication status: forthcoming in: Economic Development and Cultural Change
Handle: RePEc:iza:izadps:dp6736

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Keywords: mistargeting; crime; cash transfer programs; social capital;

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References

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  1. John Gibson & Bonggeun Kim, 2006. "Measurement Error and the Effect of Inequality on Experienced versus Reported Crime," Working Papers in Economics 06/05, University of Waikato, Department of Economics.
  2. Demombynes, Gabriel & Ozler, Berk, 2005. "Crime and local inequality in South Africa," Journal of Development Economics, Elsevier, vol. 76(2), pages 265-292, April.
  3. World Bank, 2006. "Making the New Indonesia Work for the Poor," World Bank Other Operational Studies 8172, The World Bank.
  4. Hastuti & Sudarno Sumarto & Nina Toyamah & Syaikhu Usman & Bambang Sulaksono & Sri Budiyati & Wenefrida Dwi Widyanti & Meuthia Rosfadhila & Hariyanti Sadaly & Sufiet Erlita & R. Justin Sodo & Sami Baz, 2006. "A Rapid Appraisal of The Implementation of the 2005 Direct Cash Transfer Program in Indonesia : A Case Study in Five Kabupaten/Kota," Development Economics Working Papers 22529, East Asian Bureau of Economic Research.
  5. Muliadi Widjaja, 2013. "An Economic and Social Review on Indonesia’s Direct Cash Transfer Program to Poor Families in 2005," Working Papers in Economics and Business 201304, Faculty of Economics, University of Indonesia, revised Apr 2013.
  6. Mary Kay Gugerty & Michael Kremer, 2000. "Outside Funding of Community Organizations: Benefiting or Displacing the Poor?," NBER Working Papers 7896, National Bureau of Economic Research, Inc.
  7. Eckel, Catherine C & Grossman, Philip J, 1998. "Are Women Less Selfish Than Men? Evidence from Dictator Experiments," Economic Journal, Royal Economic Society, vol. 108(448), pages 726-35, May.
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