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Targeting the Poor Using Community Information

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  • Ashok S. Rai
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    Abstract

    Governments and aid agencies target transfers to the poor, but audits to deter the rich are costly. This paper analyzes how community information can reduce targeting costs. If each community is given a hard budget constraint, then targeting costs can be substantially reduced by asking recipients to make reports about each other. Such a scheme is immune to collusion. Community information is of no help in targeting, however, if (a) it cannot be veri…ed by audits or (b) the government cannot commit to a hard budget constraint.

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    Paper provided by Center for International Development at Harvard University in its series CID Working Papers with number 22.

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    Handle: RePEc:wop:cidhav:22

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    Keywords: Targeting; Community Information; Audits; Collusion; Poverty.;

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    1. Mookherjee, Dilip & Png, Ivan, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 399-415, May.
    2. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    3. Ma, Ching-To, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 55(4), pages 555-72, October.
    4. Besley, T., 1988. "Workfare Vs. Welfare: Incentive Arguments For Work Requirements In Poverty Alleviation Programs," Papers 142, Princeton, Woodrow Wilson School - Public and International Affairs.
    5. Alderman, Harold, 2002. "Do local officials know something we don't? Decentralization of targeted transfers in Albania," Journal of Public Economics, Elsevier, vol. 83(3), pages 375-404, March.
    6. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
    7. Galasso, Emanuela & Ravallion, Martin, 2000. "Distributional outcomes of a decentralized welfare program," Policy Research Working Paper Series 2316, The World Bank.
    8. Conning, Jonathan & Kevane, Michael, 2001. "Community based targeting mechanisms for social safety nets," Social Protection Discussion Papers 23146, The World Bank.
    9. Chambers, Robert, 1994. "Participatory rural appraisal (PRA): Challenges, potentials and paradigm," World Development, Elsevier, vol. 22(10), pages 1437-1454, October.
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