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Social Cash Transfers

A Review of Targeting Effectiveness in Zambia

Social Protection A CARE International in Zambia Learning Product 2009

CARE Zambias work in Social Protection

Since 2004, CARE Zambia has been working through a Program Partnership Agreement (PPA) with the UK Governments Department for International Development (DFID) to implement a number of Social Protection projects, aimed at increasing the capacity of institutions and the most vulnerable in society to better manage risk associated with food insecurity, destitution and HIV and AIDS. The PPA programme reflects CARE Internationals vision which seeks a world of hope, tolerance and social justice where poverty has been overcome and people live in dignity and security. An estimated 64% of Zambians are poor, mostly living in rural areas (Central Statistics Office 2007) on less than US$ 1 per day. The PPA programme has focused on addressing this through a Social Protection agenda that supports both the achievement of Millennium Development Goals one, two and six, and the Government of Zambias Fifth National Development Plan (FNDP). In this context, CARE Zambia regards Social Protection as a holistic approach to protecting and promoting the livelihoods and welfare of vulnerable groups through coordinated policies and transfer mechanisms such as cash, physical resources, training and in-kind contributions. The vulnerable groups targeted include: Low capacity households including widows, the disabled, the old, and other marginalized, low-income households, and informal sector operators; Incapacitated households with no self-help potential, including mainly households affected by HIV/AIDS; Child-headed households and street children

to implement, monitor and evaluate five pilot SCT projects in Chipata, Kalomo, Kazungula, Monze and Katete. Other stakeholders also supported the Ministry in various ways. The Implementation Framework for Scaling up to a National System of Social Transfers in Zambia (MCDSS July 2007) envisages scaling up to 200,000 households. This will entail a major increase in the coverage from the current pilots, which cover about 13,000 households and individuals in five of the 72 districts in two of Zambias nine Provinces. To help guide the MCDSS, CARE engaged the consultancy group Kimetrica to do a comparative assessment of the two targeting methods being used in the pilot projects and methods currently used elsewhere. Using findings from the Kimetrica study, this Learning Product offers an review and assessment of the various approaches to targeting.

The Challenge
Suppose a Government wants to spend a total fixed amount for making Social Cash Transfers (SCTs) to reduce poverty in a given geographical area. It also has a fixed amount of a standard cash transfer for each beneficiary and the budgeted amount cannot provide a cash transfer for everyone in the area. The Government of the Republic of Zambia defines a more specific objective which is to spend this designated money to reduce as much as possible, the poverty of the poorest 10% of households in the country. The challenge then is, how will these people be targeted to receive the SCTs available? A Targeting Method is defined by the criteria it uses to select the beneficiaries. The best targeting method will be the one that allows the greatest amount of the budget to be transferred to those in the poorest 10% of the population.

The Study and its Results

CARE International in Zambia working under the auspices of the Technical Working Group for Incapacitated Households As part of the PPA, a series of learning products have been contracted Kimetrica International, a consultancy group, to developed as a means of sharing knowledge and promoting look at the performance of various targeting methods greater understanding with a wide spectrum of that were being used or could have been used for stakeholders including policy makers, Government, Poverty Gap is the five pilot SCT schemes in Zambia. These donors, and civil society. the difference pilots are managed by the Ministry of between a households Community Development and Social Services Background to the project (MCDSS) with support from CARE Zambia and resources and the the UK Department for International Objective 2 of chapter 22 of the Fifth National poverty line Development (DFID). Other stakeholders have Development Plan references reduction of extreme also supported the MCDSS in various ways. poverty in incapacitated households through welfare support. One key strategy is to support such households Kimetrica used the concept of the Poverty Gap as a simple with Social Cash Transfers (SCTs). To assist in the measure of the depth of poverty. This Gap is the difference development of a national model for SCT, CARE International between a households resources and the Poverty Line. The Zambia funded through the Department for international poverty line is defined by the World Health Organisation as Development (DFID), the Ministry of Community amount of expenditure on food required to provide the Development and Social Services (MCDSS) from 2005 to 2008

Social Protection

minimum basic nutritional standard for household members. Where resources are equal to or greater than the required nutritional expenditure the household is at or above the poverty line. If the available resources are less than basic nutritional requirements, then the household is in poverty; that is, it has a poverty gap. The degree of poverty increases as the poverty gap widens.

surveyed was calculated and used to rank the poverty level. The poorest 10% households were identified along with calculating the average and range of the poverty gaps for the households in this group set the baseline for this study. This was done before any cash transfers were made. Using the data from its surveys of the pilot

Because the poverty line is fixed, providing a social cash transfer increases available income and contributes to reducing the poverty gap. To test the poverty impact of various methods of targeting, Kimetrica first surveyed the demographic, income and expenditure situation of a sample of 2,000 households that was representative of all the households in the five pilot cash transfer areas. The average level and variance of poverty for all the sample households

Poverty line is scheme households, Kimetrica then did the amount of computer simulations of how 15 different targeting methods would have impacted on expenditure on food poverty in terms of increasing incomes and required to provide the reducing the poverty gap of the poorest minimum basic nutritional 10% after the cash transfers had been paid standards for to beneficiaries identified by a specific household targeting method.
Table 1 compares the top seven targeting methods as identified by their poverty gap index calculated pre-cash

Table1: Kimetrica ranking of the to 7 Targeting Methods

Targeting Method for SCT Means Testing with 85% data accuracy Description of Method Methodology Poverty Gap Reduction Index 4,100 Strengths Weaknesses

Implemented by completing a detailed questionnaire where applicants are required to report on their incomes and assets. If their means fall below a minimum threshold they are then entitled to receive assistance Simplest targeting methods which concentrates benefits in certain parts of a country defined as vulnerable

Gather data from all households on pre-transfer basic nutrition needs and resource capacity to meet these Use existing survey data to identify the poorest areas in a District. Give SCT to all those living in these areas Choose characteristic associated with poverty and select using a weighted measure of these Include where number of adult equivalents in households > 7

Includes the poorest

Costly to obtain data and verify accurate information, administratively difficult



Low administrative costs

Inclusion and exclusion errors, pressure from local politicians for their areas to be included

Proxy means test

Applied to avoid the costs and complexity of income assessment, by identifying local indicators of poverty that are robust, accurate and easier to observe than income This involves a single demographic characteristic number of persons in a household


Low inclusion and exclusion. Focus on known poverty causes

Difficult to administer, political pressures on choice of variables and sets up perverse incentives to meet proxies Data may over-estimate food needed per child, may have perverse incentives to import more children

Categorical Household size


Large households have higher food requirements but low incomes , especially if many children Promotes local understanding of poverty, builds on community networks

Community based

Involves communities in agreement on who is selecting beneficiaries using a form of community wealth ranking to identify poor groups

Based on local poorest based on data collected and ranked by local representatives


Tendency for inclusion and exclusion on basis of local social biases (e.g. gender and age) and creates divisiveness. Needs trusted, trained local assessors with good local knowledge Costly to obtain data and verify accurate information, administratively difficult Significant inclusion and exclusion errors, not very accurate

Low asset holdings

Focuses on assets a household has such as and, agricultural equipment, livestock etc. Uses easily verifiable characteristics of particular groups of people who are generally poorer than others, such as people with disabilities,

Based on survey data


Asset holdings give some clear indication of poverty levels Low targeting costs, objective, clear, and strong public support

Categorical age based

Include if household members aged 60 or over


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The second most effective is geographic targeting. The SCT is given to everyone in these areas, starting with the poorest area and going up the list until the available grant is exhausted. Geographical targeting is easier, provided a majority of information is already available. But politically it may be hard to explain why some areas are excluded and Explaining the Results some included. However, in terms of targeting efficiency The costs of various types of targeting in terms of the this is the most efficient method of identifying the poorest time to collect and to check data in order to be able to households, and their location. Setting aside the apply the targeting accurately are also important. question of national geographic survey costs, The costs of This is because it was assumed that the budget this would provide the most accurate way of fixed for the SCT scheme has to cover both the various types of mapping the extent of poverty in Zambia. targeting cost and pay for the SCTs allocated. targeting are integral The more costly the targeting method the less The third most effective is that of proxy to Social Cash there would be for paying out the SCTs. If all means tests using a combination of a Transfer viability SCTs are for the same amount, fewer recipients number of different (proxy) criteria, such as can get them. Thus, the total effect of a given household size, number of elderly and child method of targeting depends on its costs, which affect the dependents compared to household members of working number of SCTs that can be made and also the average age, level of educational qualifications, who heads the reduction of the poverty gap. household and the health status of all household members etc. Proxy means tests targeting usually does not involve Table 1 does not fully capture the potential costs of all getting any new information from households, but it may be targeting methods except for CBT and categorical difficult to get agreement on the weighting criteria for each targeting based on age (these were provided by CARE based proxy indicator use. on actual costs). Kimetrica observed that the cost estimates are therefore based on best practice with minimal waste and may underestimate the full costs (pg 15 of Kimetrica report). Thus, the calculations of the Poverty Gap Reduction Index should bear this in mind. To make a more comprehensive comparison it would be necessary to factor in exactly what the targeting costs would be for each method so this can be subtracted from the available budget before calculating how many households would be able to receive a transfer. Allowing for the targeting cost effect, how much a targeting method reduces the poverty gap for the poorest 10% identified before and after the use of the cash transfers depends on the extent of the targeting: Inclusion Errors: How many of the SCT recipients identified by the targeting already had incomes before the SCT that allowed them to be able to acquire their basic nutritional needs or who had poverty gaps smaller than the value of the SCT. In this case, some or the entire SCT was not needed. Exclusion Errors: How many of those ranked in the 10% group of the poorest pre-transfer are excluded by the transfer criteria. This means the money had not gone where it was most needed. Tikhozenji Phiri with her 3 grandchildren (orphans) in front of their house in Katete. Mrs Phiri, 63, is a beneficiary of SCTs targeted at the elderly.

transfer. With this post-transfer information about the size of the poverty gap, the households were re-ranked and the new 10% most poor identified. The average and variance of the poverty gaps of this group were calculated.

Community Based Targeting (CBT) used the local With the caveat above regarding the full cost of each ranking of the relative poverty situation of local households targeting method, the following five methodologies were obtained via Community Welfare Assistance chosen to be highlighted in this Learning Product. Committees working with the DSW in pilot The Kimetrica modelling study showed that the programmes in Chipata (urban), and in The Kimetrica most effective in terms of Poverty Gap Kalomo, Kazungula and Monze (rural areas). modelling study Reduction is that of means testing. The This method was seen as relatively showed that the most reduction was on average about 50% greater successful in terms of minimizing inclusion effective in terms of than any other targeting method analysed. and exclusion errors. However, using such Poverty Gap Reduction is Means testing performs well because it gets an approach also reveals both its potential information directly from each household, but that of means testing technical difficulties and openness to it is costly to collect the information and manipulation, inter alia, elite capture i.e., households may be reluctant to provide truthful inclusion of households which are non-poor, information regularly. and generally costly per person because it involves

Social Protection

A CARE International in Zambia Learning Product

more training, more steps and more people. In broad-brush terms, CBT targeting works and delivers most effectively where there is: Strong local inter-community knowledge and interaction Selection criteria developed locally An easily identifiable class of ultra-poor Equitable allocation mechanisms within community structures, with a concomitant perception of fairness within the broader community Strong support and supervisionfrom the executing agency Monica Misozi Mwanza from Chipata, her four children and a dependant (all going to school with support from the CBT scheme) in front of her house some targeting methods. This caveat is important especially in comparing the two forms of targeting, currently used in the Zambian pilots, CBT and categorical based on age. It should be noted that the Poverty Gap Reduction of the CBT is only about 6% better than the age-based categorical targeting. Statistically the difference could be insignificant and does not provide a strong reason for preferring one scheme of targeting over another. Social, political and legal considerations must also be factored in to decision making processes.

Categorical targeting based on age showed that poverty levels of the target group were not significantly lower than those of the non-targeted group. In other words, the degree of difference between categories of poor, highly vulnerable and so on, is so small as to make this form of targeting inefficient. A process of random selection could serve just as well. However, what seems clear is that the use of age-based criteria supplemented by some other category or categories, such as orphan/OVC hosting, household size, and disabilities could provide another model which provides a viable framework for national expansion. Such extensions might, of course, still be subject to abuse of enrollment. A further important consideration in assessing targeting is the social, political and legal factors that may affect the use of

End Note: Social Transfers, including SCTs, are progressively being seen as crucial for developmental, social and economic growth. However, the targeting of such benefits and the delivery model used is still subject to debate. In terms of effective scale-up, the ideal model effectively balances sustainability and cost effectiveness within acceptable levels of beneficiary inclusion and exclusion. As this review has demonstrated, all targeting methods have strengths and weaknesses which in turn have implications on effectiveness. Ultimately, the choice of a targeting method rests in the hands of Government and stakeholders necessitating the need for constructive dialogue, appreciation of the strengths and weaknesses and the strategic use of existing information such as the Kimetrica Study to make informed decisions.

Department for International Development

Republic of Zambia