This paper addresses the contested issue of the efficacy of targeting interventions in developing countries using a newly constructed comprehensive database of 111 targeted anti-poverty interventions in 47 countries. While the median program transfers 25 percent more to the target group than would be the case with a universal allocation, more than a quarter of targeted programs are regressive. Countries with higher income or governance measures and countries with better measures for voice do better at directing benefits towards poorer members of the population. Interventions that use means testing, geographic targeting, and self-selection based on a work requirement are all associated with an increased share of benefits going to the bottom two quintiles. Self-selection based on consumption, demographic targeting to the elderly, and community bidding show limited potential for good targeting. Proxy means testing, community-based selection of individuals and demographic targeting to children show good results on average, but with considerable variation. Overall, there is considerable variation in targeting performance when we examine experiences with specific program types and specific targeting methods. Indeed a Theil decomposition of the variation in outcome shows that differences between targeting methods account for only 20 percent of overall variation, the remainder is due to differences found within categories. So while these general patterns are instructive, differences in implementation are also quite important determinants of outcomes.
Targeting outcomes, redux presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 32 pp.