Focused Transfer Targeting against Poverty Evidence from Tunisia

This paper introduces a new methodology to target direct transfers against poverty. Our method is based on estimation methods that focus on the poor. Using data from Tunisia, we estimate ‘focused’ transfer schemes that highly improve anti-poverty targeting performances. Post-transfer poverty can be substantially reduced with the new estimation method. In terms of P2, the most popular axiomatically valid poverty indicator, a 30 percent reduction in poverty from transfer schemes based on OLS method to focused transfer schemes, requires only a few hours of computer work based on methods available on popular statistical packages. Finally, the obtained levels of under-coverage of the poor is so low that reforms based on ‘proxy-means’ focused transfer schemes are likely to avoid social unrest.