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Targeting the Poor Using Community Information

  • Ashok S. Rai
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    Governments and aid agencies target transfers to the poor, but audits to deter the rich are costly. This paper analyzes how community information can reduce targeting costs. If each community is given a hard budget constraint, then targeting costs can be substantially reduced by asking recipients to make reports about each other. Such a scheme is immune to collusion. Community information is of no help in targeting, however, if (a) it cannot be veri…ed by audits or (b) the government cannot commit to a hard budget constraint.

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    File URL: http://www.cid.harvard.edu/cidwp/pdf/revised22.pdf
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    Paper provided by Center for International Development at Harvard University in its series CID Working Papers with number 22.

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    Handle: RePEc:wop:cidhav:22
    Contact details of provider: Postal: Center for International Development at Harvard University (CID). 79 John F. Kennedy Street, Cambridge, MA 02138.
    Fax: 617-496-2554
    Web page: http://www.cid.harvard.edu/cidwp/
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    1. Conning, Jonathan & Kevane, Michael, 2001. "Community based targeting mechanisms for social safety nets," Social Protection Discussion Papers 23146, The World Bank.
    2. Galasso, Emanuela & Ravallion, Martin, 2000. "Distributional outcomes of a decentralized welfare program," Policy Research Working Paper Series 2316, The World Bank.
    3. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
    4. Chambers, Robert, 1994. "Participatory rural appraisal (PRA): Challenges, potentials and paradigm," World Development, Elsevier, vol. 22(10), pages 1437-1454, October.
    5. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    6. Ma, Ching-To, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 55(4), pages 555-72, October.
    7. Alderman, Harold, 2002. "Do local officials know something we don't? Decentralization of targeted transfers in Albania," Journal of Public Economics, Elsevier, vol. 83(3), pages 375-404, March.
    8. Besley, T. & Coate, S., 1989. "Workfare Vs. Welfare: Incentive Arguments For Work Requirements In Poverty Alleviation Programs," The Warwick Economics Research Paper Series (TWERPS) 314, University of Warwick, Department of Economics.
    9. Mookherjee, Dilip & Png, Ivan, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 399-415, May.
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