How can governments and aid agencies target the poorest? Some use detailed means tests, measuring assets and incomes. Others let the community decide for themselves. The first seems vulnerable to error and misrepresentation, the second to manipulation by elites.
One of the papers I’m most looking forward to at BREAD: a horse race between the means test and participatory methods.
When poverty is defined using per-capita expenditure and the common PPP$2 per day threshold, we find that community-based targeting performs worse in identifying the poor than proxy-means tests, particularly near the threshold. This worse performance does not appear to be due to elite capture.
Instead, communities appear to be systematically using a different concept of poverty: the results of community-based methods are more correlated with how individual community members rank each other and with villagers’ self-assessments of their own status. Consistent with this, community-based methods result in higher satisfaction with beneficiary lists and the targeting process.
This is only a comment to state that those in academia might want to write in a way that non-academics can appreciate. How I translated this piece:
“When trying to find out who the poor really are in a community, surveys and analysis of individual finances work better than letting the community decide by ranking themselves and each other. However, when a community owns a poverty-focused initiative they tend to be happier with the outcome than if decisions on who is rich or poor, and who should benefit, are decided for them.”
That’s valuable to know. I’m interested in your follow-up post on the paper now.
I’m glad that last sentence made it into the quote. Because if a community doesn’t believe the selected beneficiaries worthy, it’s likely the project in question won’t succeed. This is especially true if you’re targeting the community’s poorest, where you need to build linkages to those who are better off if you are really going to create the mechanisms needed to sustain project-gains.