When Poverty Reduction Meets Democracy: An Investigation into the Use of Different Evaluation Methods for Assessing the Effectiveness of a Social Program

Abstract

Abstract This paper evaluates the minimum living standard guarantee program (Dibao) in rural China using several methods including the income approach, the multidimensional poverty approach, and a proxy means test approach. We find that the targeting accuracy of the program appears greater the more comprehensive the evaluation method used—but all these methods find low levels of targeting accuracy. Because Dibao fund allocation is largely decided by the villagers, who take a more holistic view in selecting “poor” households than the various evaluation methods, we argue that the low targeting efficacy may be due to the lack of comprehensive evaluation method, as opposed to the low targeting of the program itself. This paper argues that the community-based targeting used by the Dibao program may be a better way to combat poverty in many developing countries, as it requires less administrative capacity and overcomes the difficulties of identifying poor households that qualify for assistance.