Resource information
This paper contributes to the
long-standing debate on the merits of decentralized
beneficiary targeting in the administration of development
programs, focusing on the large-scale Malawi Farm Input
Subsidy Program. Nationally-representative household survey
data are used to systematically analyze the decentralized
targeting performance of the program during the 2009-2010
agricultural season. The analysis begins with a standard
targeting assessment based on the rates of program
participation and the benefit amounts among the eligible and
non-eligible populations, and provides decompositions of the
national targeting performance into the inter-district,
intra-district inter-community, and intra-district
intra-community components. This approach identifies the
relative contributions of targeting at each level. The
results show that the Farm Input Subsidy Program is not
poverty targeted and that the national government,
districts, and communities are nearly uniform in their
failure to target the poor, with any minimal targeting (or
mis-targeting) overwhelmingly materializing at the community
level. The findings are robust to the choice of the
eligibility indicator and the decomposition method. The
multivariate analysis of household program participation
reinforces these results and reveals that the relatively
well-off, rather than the poor or the wealthiest, and the
locally well-connected have a higher likelihood of program
participation and, on average, receive a greater number of
input coupons. Since a key program objective is to increase
food security and income among resource-poor farmers, the
lack of targeting is a concern and should underlie
considerations of alternative targeting approaches that, in
part or completely, rely on proxy means tests at the local level.
