Targeting and Beneficiary Selection

Romulo Paes de Sousa,

IDB-ADB South-South learning event on Conditional Cash Transfers Manila, 16-19 April 2013

Why targeting?
Maximize results in a context of scarce budget Political economy: voters are less resistant to fund selective interventions, especially those that include co-responsibilities

Methods
Target group: poor, vulnerable, malnourished Unit of reference: household, family, individual Selection method: Geographical Categorical Means testing Community targeting/validation

All countries in LAC combine different types of targeting mechanisms

Country Program Geographic Types of targeting Categorical Means testing Income test Working children under 16 years old Displaced and indigenous families Income test Community Tool Single registry

Brazil

Bolsa Famlia PETI

Colombia

Ms Familias in Accin

Quality of life index

Honduras
Jamaica Mexico Peru

PRAF/ Bono 10,000 PATH Oportunidades Juntos

PMT
PMT PMT PMT

Discontinued

Geographic targeting
Widely used as the first stage of the process of selection of beneficiaries Attempts to identify areas (e.g. districts, municipalities, parishes, villages) with high incidence of poverty, malnutrition or vulnerability Requires data from population censuses and nationally representative household surveys Low cost, works well to identify areas with homogeneous socioeconomic characteristics Example: in Mexico, PROGRESA/Oportunidades rolled out by locality, based on the value of a marginality index

Categorical targeting
Used to restrict access to the program to households with certain demographic characteristics, which are related to the human capital development objectives (program coresponsibilities) Brazils program of eradication of child labor (PETI, from its Portuguese acronym) targets households with working individuals under 16 years old More generally, CCT programs tend to focus on households with pregnant or lactating women, children and school-age youth. In some cases, they also include the elderly, individuals with disabilities and other selected groups

Means testing
Used to further refine the selection of poor households, among those that satisfy geographical and categorical criteria In many countries, a proxy means score (a combination of assets and demographic characteristics) is compared with a predetermined eligibility threshold Proxy means test (PMT), one term hides heterogeneity of application. E.g.:
For a long time Mexico defined a poverty score based on discriminant analysis (before adopting a regression model) Colombias Familias en Accin has recently developed the new Colombian Multidimensional Poverty Index (CMPI)

Colombian Multidimensional Poverty Index selected dimensions

Table 2. Dimensions and Variables for CMPI
Variable Variable Indicator Dimension Cutoff point

Household education conditions (0.2)

Educational achievement (0.1) Literacy (0.1) School attendance (0.05)

Average education level for people 15 and older living in a household Percentage of people living in a household 15 and older who know how to read and write Percentage of children between the ages of 6 and 16 in the household that attend school Percentage of children and youths (7 17 years old) within the household that are not suffering from school lag (according to the national norm) Percentage of children between the ages of 0 and 5 in the household who simultaneously have access to health, nutrition and education Percentage of children between 12 and 17 years old in the household that are not working Percentage of a households EAP that is not facing longterm unemployment (more than 12 months) Percentage of a households EAP that is employed and affiliated with a pension fund (formality proxy) Percentage of household members over the age of 5 that are insured by the Social Security Health System Percentage of people within the household that has access to a health institution in case of need

9 years 100% 100% 100%

Childhood and youth conditions (0.2)

No school lag (0.05) Access to childcare services (0.05) Children not working (0.05) No one in long-term unemployment (0.1) Formal employment (0.1) Health insurance (0.1)

100% 100% 100%

Employment (0.2)

100% 100% 100%

Health (0.2)

Access to health services (0.1)

Means testing
A famous alternative to PMTs. In Brazil, declared per-

capita income is compared with a poverty line In order to avoid inclusion errors due to income misrepresentation, the Brazilian authorities have:
Elaborated a comprehensive monitoring system which relies on a modern unified registry of beneficiaries Leveraged the capacity of local governments to keep the list of beneficiaries clean and up to date

Means testing
PMT Income test

Identifies chronic poor Requires larger initial investment, but less verification and recertification efforts

Identifies chronic and transient poor Requires stronger audits and monitoring, and higher local government capacity

Community validation
Exploits personal knowledge on the living standards of the applicants, in order to correct errors of either inclusion or exclusion Juntos, Peru:
Served to filter out approximately 10% of the households initially selected Yet, communities were often reluctant to indicate who should be excluded from the program (due to community relations)

Oportunidades, Mexico:
Initially used community validation in rural areas. This phase, however, was later discontinued

Targeting errors: inclusion and exclusion

Source: Lindert et al. (2007) The Nuts and Bolts of Brazils Bolsa Familia Program: Implementing Conditional Cash Transfers in a Decentralized Context The World Bank.

Targeting errors: inclusion and exclusion

CCTs are generally better targeted than other social assistance programs
Pobre extremo Comedor Popular Desayuno Escolar Vaso de Leche Almuerzo Escolar Canasta Familiar Papilla (PACFO) Juntos
0% 10% 20% 30% 40% 50% 0% % de hogares que reciben el programa, por condicin de pobreza 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pobre (no extremo)

Non pobre

Beneficiarios (nivel individual)

Coverage and leakage in Perus Juntos, relative to other programs

Source: Stampini (2012). Notes: national poverty line, compared to consumption

Targeting errors: inclusion and exclusion

Yet, under-coverage and leakage persist
Coverage and leakage in selected CCT programs in LAC

Country

Program

Year

Brazil Colombia Jamaica Mexico Peru

Bolsa Familia Familias en Acc. PATH Oportunidades Juntos

2009 2010 2010 2010 2010

% of % of % of % of individuals beneficiari individuals beneficiari <2.5$ that es with <4$ that es with receive the income receive the income program >$2.5$ program >$4$ 55.1 50.0 46.8 28.1 53.4 71.4 49.9 49.4 56.0 77.9 50.5 40.5 53.4 61.4 42.5 35.8 37.4 33.1 28.5 11.3

Source: Stampini and Tornarolli (2012)

Hence the importance to invest and dynamically manage the registries of beneficiaries

Using the single registry for targeting improvements: the Brazilian example
Objective Identify population eligible for the Bolsa Famlia and other programs. It comprises 10 sets of questions Target population for the single registry Families with monthly per capita income <= minimum wage, or monthly total income <= 3 minimum wages With specific strategies for minorities and ultrapoor populations In December 2012, circa 24.9 million families were registered

Using the single registry for targeting improvements: the Brazilian example Methods of classification Person of reference declares the income of all members of the family, in an interview on a premise of a public building Government stimulates the performance of the interview at the household Strategies for preventing and correcting underreporting of family income Geographical targeting Periodical re-certification every 2 years

Using the single registry for targeting improvements: the Brazilian example
Index of Decentralized Management IDM. Incentive to the local managers to improve the reliability of the Registry. The municipality can receive up to US$ 1.66 per record if: the local Registry is consistent with demographic estimates, the data is updated, and data related to education and health conditionalities are present. The resources can be allocated for improving technological capacity of the administration and for funding programs associated with the Bolsa Familia. Incentives to the families. Families that spontaneously inform that earning have grown above the threshold can retain the bank card, which accelerates the reintroduction of the benefit in case of returning to a vulnerable condition.

Using the single registry for targeting improvements: the Brazilian example
Auditing Electronic validation of the data. Data matching with other public registries, such as: national formal employment and wages registry, death registry, and retirement and pensions registries. Visits to the municipalities by own staff or in collaboration with other agencies In 2009, inconsistencies were identified in 878,026 records of beneficiaries and 1,467,932 records of nonbeneficiary families. After the fieldwork, 194,869 families were expelled from the program, and among the non-beneficiaries: 629,692 families updated their records.

Other Country examples

Jamaica, the Beneficiary Identification System (BIS) encompasses home visits, recertification, database crosschecks, and the establishment of appeals committees to reassess the situation of households at the margin of eligibility In Colombia, the success of Familias en Accin is partially based on the credibility that the SISBEN has on the beneficiaries and non beneficiaries. The SISBEN is recognized as a competent system for selecting poor families in a transparent manner

Challenges
Urban and rural areas require different types of operation
Lack of ID Cultural differences (language, time reference, concept of family, etc.) Access to the services

Hard to reach/hidden populations Integrating social protection data with health and education data Qualified staff in sub-national levels The roles of the sub-national levels

The lessons
Mixed targeting approaches are necessary to improve the targeting PMT helps to select the beneficiaries in the first stage Good targeting adds credibility to the CCT programmes Single registries are key tools in the operation of the programs (targeting, monitoring, payment, re-certification, etc.)

Thank you

Questions and comments:

mstampini@iadb.org r.paes@ids.ac.uk ferdinandor@iadb.org