The Political Economy of Targeting

Abstract

The use of the term “targeting” in eradicating poverty is based on an analogy–a target is something fired at. It is not altogether clear whether it is an appropriate analogy. The problem is not so much that the word “target” has combative association. This it does of course have, and the relationship it implies certainly seems more adversarial than supportive. But it is possible to change the association of ideas, and in fact, to some extent, the usage has already shifted in a permissive direction. The more serious problem lies elsewhere–in the fact that the analogy of a target does not at all suggest that the recipient is an active person, functioning on her own, acting and doing things. The image is one of a passive receiver rather than of an active agent. To see the objects of targeting as patients rather than as agents can undermine the exercise of poverty removal in many different ways. The people affected by such policies can be very active agents indeed, rather than languid recipients waiting for their handouts. Not to focus on the fact that they think, choose, act, and respond is to miss something terribly crucial to the entire exercise. This is not just a terminological problem. The approach of what is called targeting often has this substantive feature of taking a passive view of the beneficiaries, and this can be a major source of allocational distortion. There is something to be gained from taking, instead, a more activity-centered view of poverty removal. Let us begin with the central case–the core argument–in favor of targeting. The theoretical point in favor of targeting in antipoverty policy is clear enough: the more accurate a subsidy in fact is in reaching the poor, the less the wastage, and the less it costs to achieve the desired objective. It is a matter of cost-effectiveness in securing a particular benefit. Or, to see it another way, it is one of maximizing the poverty-

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