Ravallion, Martin2012-06-082012-06-082007-08https://hdl.handle.net/10986/7499The 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.CC BY 3.0 IGOABSOLUTE POVERTYABSOLUTE VALUEADMINISTRATIVE COSTSADMINISTRATIVE DATAAMOUNT OF INCOMEANTI-POVERTY PROGRAMSBASIC NEEDSBENEFICIARIESBENEFICIARYCALCULATIONCASH TRANSFERSCENTRAL PLANNINGCOMMUNITY GROUPSCOMPARATIVE ECONOMICSCONSUMERCONSUMER BEHAVIORDATA REQUIREMENTSDATA SETDATA SETSDECENTRALIZATIONDEFLATORSDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDIMINISHING RETURNSDISABILITYDISTRIBUTION FUNCTIONDISTRIBUTIONAL EFFECTDISTRIBUTIONAL EFFECTSECONOMIC DEVELOPMENTECONOMIC POLICYECONOMIC REVIEWECONOMICS RESEARCHEMPIRICAL ANALYSISEXPLANATORY POWERFINANCIAL DIFFICULTIESFISCAL CONSTRAINTSFIXED COSTFUNCTIONAL FORMSGDPGROSS INCOMEHOUSEHOLD INCOMEHOUSEHOLD INCOMESIMPERFECT INFORMATIONINCOMEINCOME DISTRIBUTIONINCOME EFFECTINCOME ELASTICITYINCOME LEVELINCOME SHAREINEQUALITYINTERVENTIONLACK OF INFORMATIONLIVING STANDARDSLOCAL AUTHORITIESLOCAL POVERTYLOCAL POVERTY LINELOG INCOMELONGITUDINAL DATALOWER INCOMEMEAN INCOMEMEAN INCOMESMEASUREMENT ERRORSNATIONAL SURVEYSNEGOTIATIONNEW POORNORMAL DISTRIBUTIONNORMAL GOODPARTICIPATION RATESPOLICY DISCUSSIONSPOLICY RESEARCHPOLITICAL ECONOMYPOLITICAL INFLUENCEPOORPOOR AREASPOOR PEOPLEPOPULATION SHAREPOSITIVE CORRELATIONPOVERTY GAPPOVERTY GAP INDEXPOVERTY IMPACTPOVERTY LINEPOVERTY LINESPOVERTY PROBLEMPOVERTY RATEPOVERTY RATESPOVERTY REDUCTIONPROBABILITYPROGRAM IMPLEMENTATIONPUBLIC ECONOMICSPUBLIC EXPENDITUREPUBLIC PROGRAMSPUBLIC SPENDINGQUESTIONNAIREREAL INCOMEREDISTRIBUTIVE IMPACTREDISTRIBUTIVE POLICIESREDUCING POVERTYREGIONAL INEQUALITYRELATIVE DISTRIBUTIONRELATIVE POVERTYRISING INCOME INEQUALITYSAMPLE SIZESELECTION BIASSOCIAL ASSISTANCESOCIAL PROTECTIONSOCIAL SERVICESSOCIAL SPENDINGSTATE TAXESTARGETED TRANSFERSTARGETINGTAXATIONUNDERESTIMATESWAGESWorld Bank10.1596/1813-9450-4303