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Decentralization and Efficiency of Subsidy Targeting: Evidence from Chiefs in Rural Malawi / Pia M. Basurto, Pascaline Dupas, Jonathan Robinson.
- Format:
- Book
- Author/Creator:
- Basurto, Pia M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23383.
- NBER working paper series no. w23383
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Decentralization and Efficiency of Subsidy Targeting
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- Developing 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 or accountability advantages, but may be prone to elite capture. We study this tradeoff in the context of two large-scale subsidy programs in Malawi (for agricultural inputs and for food) decentralized to traditional leaders ("chiefs") who are asked to target the needy. Using high-frequency household panel data on neediness and shocks, 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 a PMT. This could be welfare improving, since within-village redistribution is common.
- Notes:
- Print version record
- May 2017.
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