Decentralized Beneficiary Targeting in Large-Scale Development Programs: Insights from the Malawi Farm Input Subsidy Program

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Decentralization and efficiency of subsidy targeting: Evidence from chiefs in rural Malawi

“…17 From the top panel, it is clear that chiefs target different people than the PMT would: while the PMT, by definition, would allocate subsidies to 100% of people at the bottom of the distribution, the chiefs' allocation has a much flatter gradient with respect to the PMT score. In isolation, this result looks similar to Dorward et al (2008Dorward et al ( , 2013 and Kilic et al (2013), who look at how well chiefs target based on assets and conclude that there is widespread mistargeting.…”

“…This may be one reason we find lower levels of mistargeting and elite capture here than in previous work which used assets as a proxy for need (i.e. Bardhan and Mookherjee 2006 in West Bengal), including several previous studies in Malawi (Dorward et al 2008(Dorward et al , 2013Kilic et al 2013). We also bring attention to the difference between poverty targeting and poverty reduction (the ultimate goal of subsidy programs).…”

“…Do chiefs identify the right beneficiaries? Previous work on this question concluded that there was widespread elite capture (Dorward et al, 2008;Kilic et al, 2013). These conclusions are based on evidence that "connected" households are more likely to receive subsidies, and that household assets measures do not strongly predict subsidy receipt.…”

Making Agriculture Work for the Poor in Timor-Leste

“…The estimates further indicate that FHHs are 12 percent less productive than MHHs. This finding echoes the pattern found by the UN and World Bank (2018) in Timor-Leste and by Kilic et al (2013) in many other developing agrarian countries. UN Women and the World Bank (2018) estimated that the gender gap in agricultural productivity is 15 percent in Timor-Leste; 97 percent of the gender differential in productivity was attributed to the observation that females owned fewer less resources than males.…”

What Works for Africa's Poorest

“…The prolific literature evaluating either the direct or indirect (via enhancing the potential of smallholder entry into higher-productivity income-generating niches in the agricultural market and their subsequent productivity) effects on poverty and nutrition is inconclusive. If anything, the dominant view appears to be that, contrary to programme design and intentions, coupons for seeds and fertilizers tended to be allocated in favour of relatively better-off households (Coady et al, 2002;Holden and Lunduka, 2010;Kilic et al, 2013b).…”