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The pursuit of simplicity: Can simplifying eligibility criteria improve social pension targeting?


Asri, Viola; Michaelowa, Katharina; Panda, Sitakanta; Paul, Sourabh B (2022). The pursuit of simplicity: Can simplifying eligibility criteria improve social pension targeting? Journal of Economic Behavior & Organization, 200:820-846.

Abstract

Governments in developing countries struggle to reach intended beneficiaries when targeting social transfers towards vulnerable populations. Rates of eligible individuals not receiving social transfers and ineligible individuals receiving them tend to be high, constraining the effectiveness of such anti-poverty programs. While interventions to incentivize or monitor local agents in charge of selecting beneficiaries are typically expensive, an important complementary and cost-effective approach could be to reform eligibility criteria to facilitate the selection of beneficiaries. Whether reforms should focus on reducing the number of rules, or selecting criteria which are easy to verify, or do both remains an unanswered question. We address this knowledge gap based on India’s social pension scheme for elderly poor. We find that making eligibility criteria easier to verify has the potential to achieve a substantial improvement in the targeting performance through a reduction in the exclusion error. Those who meet the relevant criteria have a much higher chance of actually becoming beneficiaries. Since eligibility criteria can be changed at low cost, this suggests a viable route for reform in many developing countries. However, a major caveat remains that criteria must sufficiently well reflect actual poverty if the more accurate selection of beneficiaries according to formal criteria shall also translate into actual poverty reduction.

Abstract

Governments in developing countries struggle to reach intended beneficiaries when targeting social transfers towards vulnerable populations. Rates of eligible individuals not receiving social transfers and ineligible individuals receiving them tend to be high, constraining the effectiveness of such anti-poverty programs. While interventions to incentivize or monitor local agents in charge of selecting beneficiaries are typically expensive, an important complementary and cost-effective approach could be to reform eligibility criteria to facilitate the selection of beneficiaries. Whether reforms should focus on reducing the number of rules, or selecting criteria which are easy to verify, or do both remains an unanswered question. We address this knowledge gap based on India’s social pension scheme for elderly poor. We find that making eligibility criteria easier to verify has the potential to achieve a substantial improvement in the targeting performance through a reduction in the exclusion error. Those who meet the relevant criteria have a much higher chance of actually becoming beneficiaries. Since eligibility criteria can be changed at low cost, this suggests a viable route for reform in many developing countries. However, a major caveat remains that criteria must sufficiently well reflect actual poverty if the more accurate selection of beneficiaries according to formal criteria shall also translate into actual poverty reduction.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
180 Ancient, medieval & eastern philosophy
290 Other religions
Uncontrolled Keywords:Organizational Behavior and Human Resource Management, Economics and Econometrics
Language:English
Date:1 August 2022
Deposited On:12 Jul 2022 14:05
Last Modified:28 Mar 2024 02:37
Publisher:Elsevier
ISSN:0167-2681
OA Status:Hybrid
Publisher DOI:https://doi.org/10.1016/j.jebo.2022.06.003
  • Content: Published Version
  • Language: English
  • Licence: Creative Commons: Attribution 4.0 International (CC BY 4.0)