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How Accurate is Food-for-Work Self-Targeting in the Presence of Imperfect Factor Markets? Evidence from Ethiopia


  • Christopher Barrett
  • Daniel Clay


Effective targeting of transfers is a key issue in public policy to combat poverty. Much faith is presently placed in self-targeting mechanisms such as public employment schemes supported by food-for-work transfers. Where targeting errors have been observed, these are usually attributed to mismanagement of key operational details, such as the project's wage rate. Using a unique data set from rural Ethiopia, we demonstrate that targeting errors may also have structural causes in some low-income countries. We hypothesise that imperfect factor markets generate a predictable dispersion across households in reservation wage rates that breaks down the unconditionally positive relation between income and shadow wages on which the theory of self-targeting public employment programmes rests. Our results confirm that the inaccuracy of FFW targeting stems from the fact that, in rural Ethiopia, higher income households are endowed with more labour per unit of land or animal. Due to poor factor markets in land and livestock these labour-abundant households have lower marginal labour productivity on farm, thereby depressing the reservation wage rates they find acceptable for FFW participation.

Suggested Citation

  • Christopher Barrett & Daniel Clay, 2003. "How Accurate is Food-for-Work Self-Targeting in the Presence of Imperfect Factor Markets? Evidence from Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 39(5), pages 152-180.
  • Handle: RePEc:taf:jdevst:v:39:y:2003:i:5:p:152-180
    DOI: 10.1080/00220380412331333189

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    References listed on IDEAS

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    Cited by:

    1. Imai, Katsushi, 2007. "Targeting versus universalism: An evaluation of indirect effects of the Employment Guarantee Scheme in India," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 99-113.
    2. Quisumbing, Agnes R., 2003. "Food Aid and Child Nutrition in Rural Ethiopia," World Development, Elsevier, vol. 31(7), pages 1309-1324, July.
    3. Stefan Dercon & Pramila Krishnan, 2003. "Food aid and informal insurance," CSAE Working Paper Series 2003-01, Centre for the Study of African Economies, University of Oxford.
    4. Shilpi, Forhad & Umali-Deininger, Dina, 2007. "Where to sell ? market facilities and agricultural marketing," Policy Research Working Paper Series 4455, The World Bank.
    5. Bezu, Sosina & Barrett, Christopher B., 2010. "Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy," MPRA Paper 55034, University Library of Munich, Germany.
    6. Bet Caeyers & Stefan Dercon, 2012. "Political Connections and Social Networks in Targeted Transfer Programs: Evidence from Rural Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 639 - 675.

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