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Evaluating the effectiveness of the Rural Minimum Living Standard Guarantee (Dibao) program in China

Author

Listed:
  • Nanak Kakwani

    (The University of New South Wales, Australia)

  • Shi Li

    (Beijing Normal University, China)

  • Xiaobing Wang

    (The University of Manchester, U.K.)

  • Mengbing Zhu

    (Beijing Normal University, China)

Abstract

China’s Rural Minimum Living Standard Guarantee program (Dibao) is the largest social safety-net program in the world. Given the scale and the popularity of Rural Dibao, it is necessary to rigorously evaluate it so that policymakers know the extent to which the program meets its intended objective of reducing poverty. This paper develops some new methods and uses data from the 2013 Chinese Household Income Project (CHIP2013) to examine the targeting performance of the rural Dibao program. The paper has found that the Rural Dibao program suffers from very low targeting accuracy, high exclusion error, and inclusion error, and yields a significant negative social rate of return. It discusses possible causes and argues that the fundamental mechanism has to be redesigned to increase the effectiveness of the program. The paper makes some recommendations to reform Dibao that will significantly improve targeting and reduce the cost of running the program. That will help China to achieve its goal of eradicating extreme poverty by 2020.

Suggested Citation

  • Nanak Kakwani & Shi Li & Xiaobing Wang & Mengbing Zhu, 2017. "Evaluating the effectiveness of the Rural Minimum Living Standard Guarantee (Dibao) program in China," Working Papers 440, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2017-440
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2017-440.pdf
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    References listed on IDEAS

    as
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    3. Brown, Caitlin & Ravallion, Martin & van de Walle, Dominique, 2018. "A poor means test? Econometric targeting in Africa," Journal of Development Economics, Elsevier, vol. 134(C), pages 109-124.
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    More about this item

    Keywords

    Dibao; policy effectiveness; poverty reduction; social rate of return.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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