Effective Targeting of Anti-Poverty Programs II

Targeting social transfers to the poor has become a means to improve poverty reduction programs. In Indonesia, the government has launched several large-scale, targeted programs, such as the Direct Cash Transfers (BLT), Health Insurance for the People (Jamkesmas) and Rice for the Poor (Raskin). Ensuring that limited program resources reach the poor instead of non-poor households remains an ongoing challenge. To improve targeting performance, Indonesia’s Ministry of National Development and Planning (BAPPENAS) has asked World Bank and J-PAL to provide technical assistance in devising a unified targeting system that can be used to select the recipients of multiple social programs. As part of this work, This study aims to test the efficacy of different targeting methods in Program Keluarga Harapan (PKH), Indonesia’s Conditional Cash Transfers (CCT) program will be evaluated. Typically, targeting is achieved through Proxy-Means Testing, where the government collects data on asset possession and uses this data to predict who falls below the poverty line. However, this method often results in high error rates (upwards of 40%) and a lack of community satisfaction. In this project, we will focus on two alternative targeting systems that feature greater community involvement: (1) Self-targeting method, wherein the poor apply to be part of the program and are independently verified, and (2) Community inclusion method, wherein the communities modify the government’s existing recipient list.