Targeting poverty under complementarities: Evidence from Indonesia's unified targeting system

Abstract

Developing countries are increasingly moving to unified targeted systems to better identify the poor and improve their outcomes. While social programs are nearly always delivered alongside one another however, the evaluations of these programs typically occur in isolation. Combining nationally representative administrative and survey data, we evaluate Indonesia's three largest social programs in unison. The setting for our evaluation is the launch of Indonesia's Unified Targeting system, an innovation developed to unify program eligibility, reduce targeting errors and increase program complementarities. Introducing a new method of evaluation under the condition of complementary programs, we show that the probability of targeted households receiving all three programs increased by 117 percent. Our analysis shows that households receiving all three complementary programs have at least 30 percentage points higher per capita expenditure than those receiving none. Our results highlight the need to account for program complementarities and provide support for unified program eligibility.