Proxy Means Test Research Articles

Fewer Questions, More Answers: Truncated Early Stopping for Proxy Means Testing

Fewer Questions, More Answers: Truncated Early Stopping for Proxy Means Testing

Improvising an E‐state: The Struggle for Cash Transfer Digitalization in Mozambique

ABSTRACTOver the last decades, there has been a proliferation of cash transfer programmes across the global South. Digital technologies have given this seeming countermovement a boost by promising to instantaneously transfer cash from the coffers of development agencies and national governments to the pockets of the poor, sidestepping the neo‐patrimonial state. With the COVID‐19 crisis, tech billionaires have teamed up with development institutions to fast‐track ‘digital payment ecosystems’ under the guise of financial inclusion and fiscal savings. Much has been written about how such initiatives accelerate the financialization of social welfare and collateralization of the poor by trapping cash transfer recipients in relations of credit and debt. Less has been written about grassroots strategies to claw back power from digital control. Drawing on ethnographic research conducted in Mozambique, this article explores three sites of contention at the interface of digital technologies and cash transfer administration: the development of an information management system, the application of a proxy means test and the outsourcing of cash transfer payments to private providers. While not always successful, the article concludes, counter‐hegemonic repertoires of action are critical to shaping the terms of cash transfer administration amidst a global ‘war of position’ in policy making.

How do the intended and unintended beneficiaries respond to the Philippines' conditional cash transfer program?

AbstractWe distinguish the effects of the Philippines’ conditional cash transfers (CCT) between the intended (poor) and unintended (nonpoor) beneficiaries. We use a proxy means test similar to what was officially used and apply it on a nationally representative sample of households to identify some poor households who are excluded and nonpoor households included in the program on account of inherent leakages in program implementation. To evaluate the CCT’s impact, we matched the poor beneficiaries with poor households excluded from the program and nonpoor beneficiaries with nonpoor households outside CCT. For the poor households, we find a reduction in wages of working children who presumably now spend more time in school in compliance with the program's conditionalities, indicating less child labor. For nonpoor households, we find some indication that program participation led to moral hazard as evidenced by lower income from salaries and wages. Since the reduction in income is greater than the increase in transfers received by nonpoor households, their savings declined.

Estimating Poverty Among Refugee Populations: A Cross-Survey Imputation Exercise for Chad

Household consumption surveys do not typically cover refugee populations, and poverty estimates for refugees are rare. This paper tests the performance of cross-survey imputation methods to estimate poverty for a sample of refugees in Chad, by combining United Nations High Commissioner for Refugees survey and administrative data. The proposed method offers poverty estimates based on administrative data that fall within a 95 percent margin of poverty estimates based on survey consumption data. This result is robust to different poverty lines, sets of regressors, and modeling assumptions of the error term. The method outperforms common targeting methods, such as proxy means tests and the targeting method currently used by humanitarian organizations in Chad.

Performance of a Novel AI-Based Proxy Means Test in Comparison to Other Methods for Targeting Pro-Poor Water Subsidies in Ghana

Performance of a Novel AI-Based Proxy Means Test in Comparison to Other Methods for Targeting Pro-Poor Water Subsidies in Ghana

Child Money and Food Stamps: A comparative analysis of Mongolian welfare programmes in theGerDistricts of Ulaanbaatar

AbstractUntil recently, the Mongolian welfare system was entirely category based. However, a new food stamps programme funded by loans from the Asian Development Bank, which targets aid according to proxy means testing, has been introduced as part of the bank’s aim to push Mongolia towards a fiscally sustainable welfare model. The food stamps programme is presented as efficient and responsible in contrast to Mongolia’s universal child money programme. Based on long-term participant observation research in thegerdistricts of Ulaanbaatar, areas inhabited by many rural-urban migrants living in poverty, this paper compares the two programmes, interweaving street-level accounts of the experiences of residents and bureaucrats alike with the respective histories and funding sources of the two programmes. Doing so provides a multi-level analysis of the emergent welfare state in Mongolia, unpicking the ‘system’ thatgerdistrict residents encounter, linking the relative influence of international financial institutions to democratic and economic cycles, and offering a critique of the supposed efficiency of targeted welfare programmes.

‘dark side’ of the LEAP CCT programme in Ghana

Studies of social transfer targeting practices and mechanisms, including the proxy means test (PMT) instrument, have often assumed that the essential purpose of these mechanisms is to ensure fairness, cost-effectiveness and efficiency, yet there is limited consensus on their optimal performance. This article builds on recent studies of social transfer targeting practices in developing countries by providing a better interpretation of the power dynamics involved in ‘translating’ the PMT instrument at the intersection of official, public and cultural discourses. It is a Foucault-based study that combines ethnography and discourse studies to analyse the everyday actions and practices of programme officials and caregivers. This study demonstrates that officials legitimise and translate the PMT instrument, separate individuals from families, and constitute them as objects for governmental intervention to achieve efficiency and cost-effectiveness. The re-categorisation of family members into households ‘outside’ of everyday sociocultural relations and practices is contested and resisted, creating a complex system of power relationships around the PMT.

Urban social assistance: Evidence, challenges and the way forward, with application to Ghana

AbstractMotivationUrban areas are growing as is urban poverty, yet few countries have developed comprehensive programmes for social assistance in urban areas. Those programmes that exist, moreover, are often extensions or duplicates of rural schemes. Urban social protection needs to reflect the distinct characteristics and vulnerabilities of the urban poor, especially that they usually work in informal activities and they face higher living costs than rural dwellers.PurposeThis article addresses two questions: what is the current evidence on effective social assistance programmes in urban areas? How can such programmes be designed and implemented in practice? The article surveys the challenges of designing social assistance programmes in urban areas, focusing on specific urban vulnerabilities, targeting the urban poor, and setting appropriate payments.Approach and methodsExisting evidence on programmes for urban social assistance, including cases from seven countries, are reviewed. Issues are examined in detail for Ghana, a rapidly urbanizing country.FindingsGhana’s flagship social assistance programme, Livelihood Empowerment Against Poverty (LEAP), that operates largely in rural areas, can and should be adjusted to urban areas. Registration by using community leaders is less effective in urban than rural areas. Instead, advertising, (social) media, direct text messaging, and identification through local non‐governmental organizations (NGOs) would be better options. Targeting can be improved by developing an urban‐specific proxy means test. Cash benefits should be increased, then adjusted regularly to counter inflation. These benefits should possibly be accompanied by subsidies for utilities and services.Policy implicationsSeveral principles to consider when designing urban social assistance emerge. Benefit levels should reflect higher living costs in urban areas and respond to inflation, especially for food and other necessities. Urban social assistance should go beyond cash transfers to focus on generating jobs (especially for young people and women), and to ensure basic services such as health care reach the urban poor, through subsidies, vouchers, or case management. Urban contexts also offer more opportunities to deliver and target social assistance through digital technologies such as mobile phones and automatic teller machines (ATM).

Targeting humanitarian aid using administrative data: Model design and validation

We develop and assess the performance of an econometric prediction model that relies on administrative data held by international agencies to target over $380 million annually in unconditional cash transfers to Syrian refugees in Lebanon. Standard metrics of prediction accuracy suggest targeting using administrative data is comparable to a short-form Proxy Means Test, which requires a survey of the entire target population. We show that small differences in accuracy across approaches are largely attributable to a few data fields. These results are robust to a blind validation test performed on a random sample collected after the model derivation, as well as the type of estimator used for prediction. We discuss relative costs, which are likely to feature prominently when alternative approaches are considered in practice.

Efficiency, Legitimacy, and Impacts of Targeting Methods: Evidence from an Experiment in Niger

AbstractThe methods to select safety net beneficiaries are the subject of frequent debates. Targeting assessments usually focus on efficiency by documenting the pre-program profile of selected beneficiaries. This study provides a more comprehensive analysis of targeting performance through an experiment embedded in a national cash transfer program in Niger. Eligible villages were randomly assigned to have beneficiary households selected by community-based targeting (CBT), proxy-means testing (PMT), or a formula to identify the food-insecure (FCS). The study considers targeting legitimacy and the impact of targeting choice on program effectiveness based on data collected after program roll-out. PMT is more efficient in identifying households with lower consumption per capita. Nonbeneficiaries find formula-based methods (PMT and FCS) more legitimate than CBT. Manipulation and information imperfections affect CBT, which can explain why it is not the most legitimate. Program impacts on some welfare dimensions are larger among households selected by PMT than CBT.

Unconditional Cash Transfers and Women Empowerment: The Case of Benazir Income Support Programme (BISP) in Pakistan

This study has explored the welfare impact of Benazir Income Support Program’s (BISP) unconditional cash transfers on women empowerment. The program was initiated in 2011 by the government of Pakistan. The impact has been computed by using two follow up rounds i.e, 2011 & 2016 where baseline was carried out in 2011 and follow-up round was carried out in 2016. Regression Discontinuity Design approach was used to measure casual effects of the BISP cash transfers on women empowerment by selecting target and control groups based on proxy means test. The overtime impact have been estimated by employing Difference in Difference (DiD) model on panel households from 2011-2016. The study observed that BISP led to improve socio-economic wellbeing of the beneficiary women. It has brought improvement in women mobility and women participation in voting. The important contribution is an improvement in the aspect of socio-economic and political empowerment and women mobility across time and overtime. This showed continues support for longer period brought desired results.

Assesing efficiency of targeting in social services in Federation of Bosnia and Herzegovina

Abstract This paper analyses the inefficiency of social services targeting in the Federation of Bosnia and Herzegovina (FB&H). Using official statistics microdata of the Household Budget Survey 2015, three models of social minimum in FB&H were constructed: extreme and general poverty, and the model with multidimensional poverty aspects. The analysis of features of poor household categories showed that the most vulnerable residents of FB&H are not beneficiaries of permanent financial assistance. The reason for such an inefficient targeting was recognized in the Federal Law on Principles of Social Care, Care for the War-Disabled Civilians and Care for Families with Children that stipulates that only persons and families that (cumulatively): are incapable for work, have insufficient income, and there are no family members who are legally obligated to support them. The results indicated a high inconsistency in the legal criteria for qualification, and also in the amounts of permanent social assistance among cantons. The Proxy Means Test (PMT) Model is offered as one of the possible solutions for the improvement of social services targeting in FB&H. Given the importance of efficiency of targeting in social services, the research results could be useful, for both, vulnerable segments of the society and federal and cantonal ministries of labour and social affairs, in the process of targeting the households qualified for social support programmes.

Proxy Means Testing Vulnerability to Measurement Errors?

Proxy Means Testing (PMT) is a popular method to target the poor in developing countries. PMT usually relies on survey-based consumption data and assumes random measurement errors – an assumption that has been challenged by recent literature. Using a survey experiment conducted in Tanzania, this paper brings causal evidence on the impact of non-random errors on PMT performances. Results show that non-random errors bias the coefficients from PMT models, resulting in a 5 to 27 per cent reduction in PMT predictive performances. Moreover, non-random errors induce a 10 to 34 per cent increase in the incidence of targeting errors when poverty is defined in absolute terms. More reassuringly, impacts on the ranking of households are smaller and essentially non-significant. Taken together, these results indicate that PMT performances are quite vulnerable to non-random errors when the objective is to target absolutely poor households, but remain largely unaffected when the objective is to target a fixed share of the population.

The (lack of) distortionary effects of proxy-means tests: Results from a nationwide experiment in Indonesia

Many developing country governments determine eligibility for anti-poverty programs using censuses of household assets. Does this distort subsequent reporting of, or actual purchases of, those assets? We ran a nationwide experiment in Indonesia where, in randomly selected provinces, the government added questions on flat-screen televisions and cell-phone SIM cards to the targeting census administered to 25 million households. In a separate survey six months later, households in treated provinces report fewer televisions, though the effect dissipates thereafter. We find no change in actual television sales, or reported or actual SIM card ownership, suggesting that consumption distortions are likely small.

How to Target Households in Adaptive Social Protection Systems? Evidence from Humanitarian and Development Approaches in Niger

The methods used to identify the beneficiaries of programmes aiming to address persistent poverty and shocks are subject to frequent policy debates. Relying on panel data from Niger, this report simulates the performance of various targeting methods that are widely used by development and humanitarian actors. The methods include proxy-means testing (PMT), household economy analysis (HEA), geographical targeting, and combined methods. Results show that PMT performs more effectively in identifying persistently poor households, while HEA shows superior performance in identifying transiently food insecure households. Geographical targeting is particularly efficient in responding to food crises, which tend to be largely covariate. Combinations of geographical, PMT, and HEA approaches may be used as part of an efficient and scalable adaptive social protection system. Results motivate the consolidation of data across programmes, which can support the application of alternative targeting methods tailored to programme-specific objectives.

Decentralization and efficiency of subsidy targeting: Evidence from chiefs in rural Malawi

Lower-income countries spend vast sums on subsidies. Beneficiaries are typically selected via either a proxy-means test (PMT) or through a decentralized identification process led by local leaders. A decentralized allocation may offer informational advantages, but may be prone to elite capture. We study this trade-off in the context of two large-scale subsidy programs in Malawi (for agricultural inputs and food) decentralized to traditional leaders (“chiefs”) who are asked to target the needy. Using household panel data, we find that nepotism exists but has only limited mistargeting consequences. Importantly, we find that chiefs target households with higher returns to farm inputs, generating an allocation that is more productively efficient than what could be achieved through strict poverty-targeting. This could be welfare improving, since within-village redistribution is common. Productive efficiency targeting is concentrated in villages with above-median levels of redistribution.

Poverty alleviation strategies under informality: evidence for Latin America

Strategies based on growth and inequality reduction require a long-run horizon, and this paper therefore argues that those strategies need to be complemented by poverty alleviation programs. With regards to such programs, informality in Latin America and the Caribbean is a primary obstacle to carry out means testing income-support programs, and countries in the region have therefore mostly relied on proxy means testing mechanisms. This paper studies the relative effectiveness of these and other mechanisms by way of a formal model in which workers choose between job opportunities in the formal and informal sectors. Although the means testing mechanism allows for a more pro-poor design of transfers, it distorts labor decisions made by workers. On the other hand, (exogenous) proxy means testing does not cause distortions, but its pro-poor quality is constrained by the power of observable characteristics to infer income levels. However, since taxation is necessary to fund programs, redistribution becomes less effective, especially for programs other than means testing. The paper concludes by discussing the implications of these results for the design of more efficient targeting programs.

Targeting subsidised inpatient services to the poor in a setting with limited state capacity: proxy means testing in Myanmar's hospital equity fund scheme.

Many low- and middle-income countries (LMICs) provide subsidised access to health services for the poor. Proxy means tests (PMTs) for income are typically employed to identify eligible beneficiaries for subsidised services but often result in significant mistargeting of benefits. We assessed the PMT approach used in Myanmar's hospital equity fund (HEF). We analysed inclusion/exclusion errors by comparing household eligibility under the PMT used for HEF with household consumption (the gold standard proxy for income in LMICs). We assessed receipt of benefits post-hospitalisation against HEF eligibility rules and household income. Focus groups/interviews were conducted to understand administrative factors that influence targeting. We modelled (linear regression) predictors of household consumption to improve PMT accuracy. We found large targeting errors (86% of households in the bottom consumption quartile would be excluded and 15% of households in the top consumption quartile deemed eligible). HEF scores for PMT held little explanatory power for household income: 93% of individuals meeting the HEF eligibility criteria did not receive benefits post-hospitalisation, while 23% of ineligible individuals received programme support. Re-weighting PMT indicators on electricity access, land ownership and livestock ownership, and assigning weights to home-ownership, households with elderly/disabled members and household head education levels could significantly improve targeting accuracy. Poor programme awareness and uneven adherence to official eligibility determination procedures among staff likely affected targeting. Re-weighting PMT indicators and increasing training and communication about qualification procedures could improve allocation of limited funds, though accurate targeting may continue to be challenging in contexts of low state capacity.

Are female-headed households less resilient? Evidence from Oxfam’s impact evaluations

ABSTRACTGiven the complexity of measuring resilience, development practitioners are constantly seeking observable proxies that can help target resilience-building initiatives. Evidence suggests that female-headed and male-headed households differ in terms of their vulnerability and resilience, so household head gender may provide policymakers with important information about how best to target their interventions. However, the extent to which these gender differences can be explained by other observable characteristics, such as education and household demographics, remains an open question. Using an index of resilience employed by a large non-governmental organization (Oxfam GB), we provide evidence on this question by comparing the resilience of female- and male-headed households interviewed in a series of 16 evaluations of rural development projects carried out in 12 countries across Africa, Asia, and Latin America. We find that there is a statistically significant difference between female- and male-headed households, on average, in terms of their measured resilience, and that only just over half of this difference can be explained by observable characteristics. However, since the size of this difference is small, using information on household head gender does not significantly improve the accuracy of targeting methods, such as proxy means tests, that aim to identify households for resilience-building initiatives.

Cash Transfers and Gender Differentials in Child Schooling and Labor: Evidence from the Lesotho Child Grants Programme

Cash Transfers and Gender Differentials in Child Schooling and Labor: Evidence from the Lesotho Child Grants Programme