Regional Poverty Targeting China

We evaluate the effectiveness of regional targeting in China’s large-scale poverty alleviation program begun in 1986 by analyzing a panel data set of all counties in China for the period 1981–1995. Estimates of models of poor county designation and poverty fund allocation and newly defined targeting gap and targeting error measures show that political factors have affected targeting and that leakage has increased while coverage has improved. Only one of the three main programs is progressive. Growth model estimates find that poor county designation increased incomes per capita by 2.28% per year during 1985–1992 and 0.91% during 1992–1995. These results are relatively robust to redefining control groups using propensity-score matching methods.