Targeting Transfers: Innovative Solutions to Familiar Problems

Abstract

Summaries The case for targeting cash or in?kind transfers to the poor – that it maximises cost?effectiveness and equitable allocation of scarce public resources – is partially offset by the administrative, social and political costs that targeting introduces. This article examines practical applications of three alternative targeting mechanisms: self?targeting, individual assessment, and group characteristics. It finds that current international ‘conventional wisdom’ – which favours, for example, introducing gender quotas to public works projects and minimising administration costs to maximise transfers to beneficiaries – often leads to perverse outcomes, which have motivated innovative modifications in specific local contexts.