IDEAS home Printed from
   My bibliography  Save this article

Pilferage from opaque food subsidy programs: Theory and evidence


  • Mehta, Aashish
  • Jha, Shikha


Theft rates from subsidized food programs vary greatly and strongly influence program efficiency. Unfortunately, the determinants of these variations remain understudied because the agencies that run these programs seldom publicize the allocations of subsidized food to local markets. We develop a theoretical model of pilferage which predicts that: (i) pilferage from opaque programs is likely to rise more than proportionately with per capita food allocations; (ii) pilferage of inferior goods may be lower in poorer communities; (iii) pilferage rates need not rise as price subsidies are increased; and (iv) pilferage may rise as the relative quality of subsidized food is reduced. A comprehensive literature review and new estimates of pilferage across regions of the Philippines validates these predictions. Our finding, that around 48% of the subsidized rice went missing, is robust to new tests for sampling and recall error. Our policy discussion encourages geographic over administrative targeting, greater transparency in food allocations, and the use of realistic quotas.

Suggested Citation

  • Mehta, Aashish & Jha, Shikha, 2014. "Pilferage from opaque food subsidy programs: Theory and evidence," Food Policy, Elsevier, vol. 45(C), pages 69-79.
  • Handle: RePEc:eee:jfpoli:v:45:y:2014:i:c:p:69-79
    DOI: 10.1016/j.foodpol.2014.01.002

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Ramaswami, B. & Balakrishnan, P., 2002. "Food prices and the efficiency of public intervention: the case of the public distribution system in India," Food Policy, Elsevier, vol. 27(5-6), pages 419-436.
    2. Celia M. Reyes & Alellie B. Sobrevinas & Joel Bancolita & Jeremy de Jesus, 2009. "Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines," Development Economics Working Papers 22687, East Asian Bureau of Economic Research.
    3. World Bank, 2001. "Philippines : Filipino Report Card on Pro-Poor Services," World Bank Other Operational Studies 14022, The World Bank.
    4. Alderman, Harold & Lindert, Kathy, 1998. "The Potential and Limitations of Self-Targeted Food Subsidies," World Bank Research Observer, World Bank Group, vol. 13(2), pages 213-229, August.
    5. Jayne, T. S. & Strauss, John & Yamano, Takashi & Molla, Daniel, 2001. "Giving to the Poor? Targeting of Food Aid in Rural Ethiopia," World Development, Elsevier, vol. 29(5), pages 887-910, May.
    6. Beatrice Lorge Rogers & Jennifer Coates, 2002. "Food-Based Safety Nets and Related Programs," Working Papers in Food Policy and Nutrition 12, Friedman School of Nutrition Science and Policy.
    7. Reetika Khera, 2011. "India's Public Distribution System: Utilisation and Impact," Journal of Development Studies, Taylor & Francis Journals, vol. 47(7), pages 1038-1060.
    8. Alderman, Harold, 1988. "The twilight of flour rationing in Pakistan," Food Policy, Elsevier, vol. 13(3), pages 245-256, August.
    9. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 703-745.
    10. Ahluwalia, Deepak, 1993. "Public distribution of food in India : Coverage, targeting and leakages," Food Policy, Elsevier, vol. 18(1), pages 33-54, February.
    11. Asian Development Bank (ADB), 2013. "Empowerment and Public Service Delivery in Developing Asia and the Pacific," ADB Reports RPT135565-3, Asian Development Bank (ADB), revised 15 May 2013.
    12. Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2000. "Political sustainability and the design of social insurance," Journal of Public Economics, Elsevier, vol. 75(3), pages 341-364, March.
    13. Jha, Skikha & Ramaswami, Bharat, 2012. "The Percolation of Public Expenditure: Food Subsidies and the Poor in India and the Philippines," India Policy Forum, National Council of Applied Economic Research, vol. 8(1), pages 95-138.
    14. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    15. Ramadan, Racha & Thomas, Alban, 2011. "Evaluating the impact of reforming the food subsidy program in Egypt: A Mixed Demand approach," Food Policy, Elsevier, vol. 36(5), pages 638-646.
    16. Mehta, Aashish & Jha, Shikha & Quising, Pilipinas, 2013. "Self-targeted food subsidies and voice: Evidence from the Philippines," Food Policy, Elsevier, vol. 41(C), pages 204-217.
    17. De Donder, Philippe & Hindriks, Jean, 1998. "The Political Economy of Targeting," Public Choice, Springer, vol. 95(1-2), pages 177-200, April.
    18. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
    19. Lorge Rogers, Beatrice & Coates, Jennifer, 2002. "Food-based safety nets and related programs," Social Protection and Labor Policy and Technical Notes 29735, The World Bank.
    20. Sobrevinas, Alellie B. & de Jesus, Jeremy & Reyes, Celia M. & Bancolita, Joel E., 2009. "Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines," Discussion Papers DP 2009-07, Philippine Institute for Development Studies.
    21. Timmer, C. Peter, 2010. "Reflections on food crises past," Food Policy, Elsevier, vol. 35(1), pages 1-11, February.
    22. Gelbach Jonah B. & Pritchett Lant, 2002. "Is More for the Poor Less for the Poor? The Politics of Means-Tested Targeting," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-28, July.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Chakrabarti, Suman & Kishore, Avinash & Roy, Devesh, 2016. "Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system," IFPRI discussion papers 1588, International Food Policy Research Institute (IFPRI).


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:45:y:2014:i:c:p:69-79. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.