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Distributional outcomes of a decentralized welfare program

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Author Info
Galasso, Emanuela
Ravallion, Martin

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Abstract

It is common for central governments, to delegate authority over the targeting of welfare programs to local community organizations - which may be better informed about who is poor, though possibly less accountable for getting the money to the local poor - while the center retains control over how much goes to each local region. The authors outline a theoretical model of the interconnected behavior of the various actors in such a setting. The model's information structure provides scope for econometric identification. Applying data for a specific program in Bangladesh, they find that overall targeting was mildly pro-poor, mostly because of successful targeting within villages. But this varied across villages. Although some village characteristics promoted better targeting, these were generally not the same characteristics that attracted resources from the center. The authors observe that the center's desire for broad geographic coverage, appears to have severely constrained the scope for pro-poor village targeting. However, poor villages tended not to be better at reaching their poor. They find some evidence that local institutions matter. The presence of cooperatives for farmers and the landless, appears to be associated with more pro-poor program targeting. The presence of recreational clubs has the opposite effect. Sometimes the benefits of decentralized social programs are captured by local elites, depending on the type of spending being decentralized. When public spending us on private (excludable) good, and there is no self-targeting mechanism to ensure that only the poor participate, there is ample scope for local mis-targeting.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2316.

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Date of creation: 30 Apr 2000
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Handle: RePEc:wbk:wbrwps:2316

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Related research
Keywords: Services&Transfers to Poor; Poverty Impact Evaluation; Poverty Reduction Strategies; Environmental Economics&Policies; Poverty Monitoring&Analysis; Safety Nets and Transfers; Rural Poverty Reduction; Services&Transfers to Poor; Governance Indicators; Poverty Impact Evaluation;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lanjouw, Jean Olson, 1999. "Information and the operation of markets: tests based on a general equilibrium model of land leasing in India," Journal of Development Economics, Elsevier, vol. 60(2), pages 497-527, December. [Downloadable!] (restricted)
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  9. Eliana La Ferrara, . "Inequality and Group Participation: Theory and Evidence from Rural Tanzania," Working Papers 161, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  10. M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
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  11. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May. [Downloadable!] (restricted)
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  1. Lant Pritchett & Sudarno Sumarto & Asep Suryahadi, 2002. "Targeted Programs in an Economic Crisis: Empirical Findings from the Experience of Indonesia," Governance Working Papers 84, East Asian Bureau of Economic Research. [Downloadable!]
  2. Dinar, Ariel & Kemper, Karin & Blomquist, William & Kururulasuriya, Pradeep, 2006. "The Process and Performance of Decentralization of River Basin Resource Management: A Global Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21093, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Ashok S. Rai, . "Targeting the Poor Using Community Information," CID Working Papers 22, Center for International Development at Harvard University. [Downloadable!]
  4. Das Gupta, Monica & Grandvoinnet, Helene & Romani, Mattia, 2003. "Fostering community-driven development - What role for the State?," Policy Research Working Paper Series 2969, The World Bank. [Downloadable!]
  5. Pranab K. Bardhan & Dilip Mookherjee, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May. [Downloadable!] (restricted)
  6. Susan Steiner, 2005. "Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact," Public Economics 0508006, EconWPA. [Downloadable!]
    Other versions:
  7. Pranab Bardhan & Dilip Mookherjee, 2002. "Relative Capture of Local and Central Governments: An Essay in the Political Economy of Decentralization," Center for International and Development Economics Research, Working Paper Series 1013, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
    Other versions:
  8. Van de Walle, Dominique, 2002. "The static and dynamic incidence of Vietnam's public safety net," Policy Research Working Paper Series 2791, The World Bank. [Downloadable!]
  9. Pranab Bardhan, 2006. "Pro-Poor Targeting and Accountability of Local Governments in West Bengal," Working Papers id:773, esocialsciences.com. [Downloadable!]
    Other versions:
  10. Matias Barenstein & Luiz de Mello, 2001. "Fiscal Decentralization and Governance: A Cross-Country Analysis," IMF Working Papers 01/71, International Monetary Fund. [Downloadable!]
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