Efficiency Versus Effectiveness in Targeting Scaled Social Assistance Programs Evidence from a Nationwide Policy Experiment

Abstract

Aid agencies and their donors are highly attuned to simultaneous goals of targeting efficiency and program impact. We analyze the relationship between these two aspects of program design through a high-value unconditional cash transfer program that tested the implications of targeting different types of deprivation in a nationwide randomized field experiment. Changing the targeted deprivation results in prioritizing assistance for households with distinct demographics and economic constraints. Despite these differences, targeting efficiency does not necessarily lead to program effectiveness, even when the program’s success is narrowly defined as alleviating the specific type of deprivation it aims to address. There is modest heterogeneity in program effectiveness related to targeting choices, but more substantial heterogeneity across locations – highlighting the primacy of local market conditions for program effectiveness. Data typically available to program designers can be used effectively to prioritize specific populations, but this does not necessarily lead to an allocation of resources where the program will be more effective.

Citation: Onur Altındağ, Stephen D. O’Connell, Efficiency Versus Effectiveness in Targeting Scaled Social Assistance Programs Evidence from a Nationwide Policy Experiment, Working Paper, 2023.