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Geographic inequity in a decentralized anti-poverty program : a case study of China
 
Author:Ravallion, Martin; Collection Title:Policy Research working paper ; no. WPS 4303
Country:World; Date Stored:2007/08/06
Document Date:2007/08/01Document Type:Policy Research Working Paper
SubTopics:Poverty Monitoring & Analysis; Economic Theory & Research; Inequality; ; Services & Transfers to PoorLanguage:English
Rel. Proj ID:1W-Growth And Trade Policy -- -- P109675;Region:The World Region
Report Number:WPS4303Volume No:1 of 1

Summary: The central governments of many developing countries have chosen to decentralize their anti-poverty programs, in the expectation that local agents are better informed about local needs. The paper shows that this potential advantage of decentralized eligibility criteria can come at a large cost, to the extent that the induced geographic inequities undermine performance in reaching the income- poor nationally. These issues are studied empirically for (probably) the largest transfer-based poverty program in the world, namely China's Di Bao program, which aims to assure a minimum income through means-tested transfers. Poor municipalities are found to adopt systematically lower eligibility thresholds, reducing the program's ability to reach poor areas, and generating considerable horizontal inequity.

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