Elite capture, the “follow-up checks” policy, and the targeted poverty alleviation program: Evidence from rural western China

Abstract

Decentralized methods for targeting poverty are widely adopted in developing countries to improve the performance of various poverty alleviation programs. A common challenge for implementing successful decentralized targeting is the existence of elite capture. China has recently implemented a nationwide decentralized poverty targeting program, the targeted poverty alleviation (TPA) policy, to achieve the national goal of eliminating absolute poverty by the end of 2020. As the largest decentralized poverty targeting program in the world, TPA’s successful implementation was believed to be threatened by elite capture in some earlier reports. Since 2015, a targeting correction mechanism, called “follow-up checks” policy, has been introduced. With the “follow-up checks” policy, the elites and other ineligible households who receive benefits under TPA were removed from the program. This paper investigates the elite capture phenomenon in TPA using village census data from a poverty-stricken county in 2017 – two years after implementing the “follow-up checks” policy. We find no evidence of elite capture in TPA. The elites are unlikely to become beneficiaries or receive more benefits than non-elites. Our results contradict earlier findings that reported elite capture in TPA. We argue that the reason is the accountability emphasized by the central government in the “follow-up checks” policy. Our findings imply that having proper accountability is critical for improving targeting performance by global antipoverty initiatives.