How can social transfers best be targeted to address financial poverty? How can decision-makers navigate trade-offs between different targeting choices? This guidance note presents a ‘targeting decision tree’. It outlines the minimum data and information requirements for good targeting and the questions requiring answers. Decisions should be based on whether targeting is appropriate, achievable and acceptable. Successful targeting is made easier if programmes have one realistic objective, and if they distinguish clearly between who should be eligible for support and how to identify the eligible.
Targeting is appropriate when it contributes to, or enhances the achievement of, programme goals and objectives. Assessing what targeting is appropriate identifies who should be reached. Targeting is achievable when governments and development partners are adequately resourced to implement it effectively. Financial, infrastructure and human resource constraints mean that trade-offs have to be made between what is appropriate and what is achievable. Finally, targeting is acceptable when it receives enough popular and government support (and thus funding) to make programme delivery sustainable.
Step 1: Evaluate what is appropriate
- Identify the range of poverty lines below which the programme is aiming to provide support.
- Calculate how many poor households are deemed ineligible for support using proxy indicators.
- Calculate how many non-poor households are deemed eligible for support using proxy indicators.
- Calculate the cost of deeming non-poor households eligible for support using proxy indicators.
- Assess the extent of trade-offs between including the non-poor, and deeming the poor ineligible.
Step 2: Evaluate what is achievable
- First, compare targeting cost estimates from other programmes with similar coverage, duration, objectives, size of transfer and total budget. Then assess the extent to which these correlate with levels of inclusion errors (leakage) and exclusion errors (undercoverage). Where country data is available, the World Bank’s Social Protection ADePT tool provides a mechanism for comparing inclusion and exclusion errors.
- Assess the context. Features that will influence targeting choices include poverty depth, physical accessibility, access to information and the risks that may affect targeting options, such as conflict.
- Assess capacity to carry out targeting.
- Assess the implications that costs, capacity and context have for different targeting options.
Step 3: Evaluate what is acceptable
- Analyse public and government attitudes towards redistributive measures.
- Assess the propensity of social transfers to reduce or worsen social stigma.
- Analyse how far targeting only the poorest people is acceptable. Household survey data can be analysed to assess the risk that targeting the poorest will result in exclusion of others whose welfare is only fractionally better. Public opinion may be more opposed to the wastage of inclusion errors than to wrongly excluding those entitled to benefits.
Finally, when considering the evidence gathered during the steps above, it is important to bear in mind the following points:
- Existing policies and practices may limit targeting options: Appropriateness can be undermined by the absence of a ‘clean slate’; governments or donors may have decided that their objective is to deliver an instrument to a specific group before assessing the problem.
- Beware of accepting the status quo: If social transfers are to transform societies, negative attitudes about poor people must be challenged. Targeting may need to be accompanied by information campaigns that make the case for targeted transfers. Limits on targeting choices imposed by prior decisions or by ‘acceptability’ may need to be questioned.
- There are no perfect solutions: Contexts vary and what works in one place will not automatically work in another.
- Keep it simple: Successful targeting is more likely when programmes have a clearly-defined and small number of objectives that do not compete with each other.
