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Are there lasting impacts of aid to poor areas ? Evidence from rural China

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  • Chen, Shaohua
  • Mu, Ren
  • Ravallion, Martin

Abstract

The paper revisits the siteof a large, World Bank-financed, rural development program in China 10 years after it began and four years after disbursements ended. The program emphasized community participation in multi-sectoral interventions (including farming, animal husbandry, infrastructure and social services). Data were collected on 2,000 households in project and nonproject areas, spanning 10 years. A double-difference estimator of the program's impact (on top of pre-existing governmental programs) reveals sizeable short-term income gains that were mostly saved. Only modest gains to mean consumption emerged in the longer term-in rough accord with the gain to permanent income. Certain types of households gained more than others. The educated poor were under-covered by the community-based selection process-greatly reducing overall impact. The main results are robust to corrections for various sources of selection bias, including village targeting and interference due to spillover effects generated by the response of local governments to the external aid.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4084.

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Date of creation: 01 Mar 2008
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Handle: RePEc:wbk:wbrwps:4084

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Keywords: Rural Poverty Reduction; Access to Finance; Poverty Monitoring&Analysis; Economic Theory&Research;

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References

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  1. Jalan, Jyotsna & Ravallion, Martin, 1998. "Behavioral responses to risk in rural China," Policy Research Working Paper Series 1978, The World Bank.
  2. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2000. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," NBER Technical Working Papers 0251, National Bureau of Economic Research, Inc.
  3. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
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  9. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
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  16. Guido W. Imbens, 2003. "Nonparametric Estimation of Average Treatment Effects under Exogeneity: A Review," NBER Technical Working Papers 0294, National Bureau of Economic Research, Inc.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. What will we learn from Millennium Villages?
    by jdingel in Trade diversion on 2010-03-18 18:24:58
  2. Why a Careful Evaluation of the Millennium Villages Is Not Optional
    by Michael Clemens in Global Development: Views from the Center on 2010-03-18 10:45:00
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Cited by:
  1. Deininger, Klaus & Liu, Yanyan, 2009. "Economic and social impacts of self-help groups in India," Policy Research Working Paper Series 4884, The World Bank.

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