Targeting social assistance in Azerbaijan: what can we learn from micro‐data?

Abstract

This article investigates the targeting performance of social assistance programmes in Azerbaijan, a low‐income country in transition from a centrally‐planned economy to a market economy. Micro‐data from a nationally‐representative household survey are used, through the employment of several empirical approaches, to assess the extent to which social assistance identified the neediest households. The set of empirical evidence presented in this article shows a low targeting effectiveness of the social assistance programmes. It indicates that a significant proportion of the poor did not benefit from social assistance, whilst a substantial share of social benefits was leaked to the non‐poor. The receipt of benefits was also weakly associated with a variety of indicators of living standards including consumption, education, number of children, ownership of dwelling, household durables, motor vehicles, agricultural assets, and access to sanitation and utility supply as well as social capital. It is argued that the current social assistance programmes should be reformed to increase the success in reaching the poor.