Reaching the Poor with Poverty Projects: What is the Evidence on Social Returns?

This paper studies evidence on the impact of poverty projects in India, Thailand, Philippines, Indonesia and People’s Republic of China. In practice, quantitative assessment of poverty programs are made in the form of cost-effectiveness calculations based on cost per unit of benefit received by the poor

Many poverty programs appear high cost due to under-coverage and leakage. Problems also arise due to difficulties in identifying the poor, technical errors in design and poor governance. Study findings include:

• Poverty targeted interventions of the 1990s have cost modest amounts, but their leakage rates have been disappointingly high;
• Some of these schemes have, however, been influential in protecting the poor from adverse shocks;
• Improvements in governance and technical designs require a combination of broad targeting and selective, narrowly-focused support for the very poor.

Broad targeting measures reach the poor disproportionately in a number of countries. There is a strong need to reach the poor directly and minimize the leakage and under-coverage seen in poverty programs. While technical improvements like poverty mapping techniques offer a means of better identifying the poor, risk of misuse of funds remains in the absence of strong governance.