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Community-based Targeting and Initial Local Conditions: Evidence from Indonesia’s IDT Program

  • Chikako Yamauchi

Community-based selection of social program recipients has the potential to benefit from local knowledge about individuals in need. This informational advantage however might be offset by local elite capture and administrative incompetency. Using Indonesia's anti-poverty program, this paper investigates which pre-program conditions are associated with community-based targeting outcomes. Results show that wealthier and more unequal villages constantly target better. This suggests that, though there is much concern about local capture in communities with large inequality, the ease of identifying the poor could overwhelm the possibly larger political influence of local elites. Also, villages headed by young, educated persons initially exhibit better targeting, but lose this advantage over time, as the monitoring of loan disbursement becomes more difficult for village heads. I explore Indonesia's political context, which provides insight into these findings.

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File URL: http://cbe.anu.edu.au/researchpapers/cepr/DP584.pdf
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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 584.

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Date of creation: Aug 2008
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Handle: RePEc:auu:dpaper:584
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