Ben Olken discusses the effectiveness and trade-offs of different methods of targeting development assistance.
How should government effectively target the poorest sections of society? Ben Olken (MIT) studies two approaches to target development assistance in Indonesia. Namely, the proxy means test and the community based approach. The study finds that while the proxy means test method is better at targeting those below a defined income, the community based approach better identifies those who are poor according to local perceptions that are not solely based on income or wealth.