Thanks for this. But, it does seem that millions of people ended up with lower incomes in Ghana as a result of fuel subsidy reform, but only around 75,000 households received some compensation. This does not suggest to me that LEAP’s tiny expansion can have had much impact at all.
It’s interesting to hear that the Proxy Means Test produced good targeting. I’ve done a lot of research on the PMT and the methodology has very significant inherent design errors, which produce - when targeted at the 2.5% of households living in the most extreme poverty - exclusion errors of around 80-90% (when assessed against coverage of those 2.5%). In fact, we showed that the PMT as entirely inappropriate when targeting such a small proportion of the population. I’ve attached a paper we did on the PMT to explain the methodology so that you can see how problematic it is (and there’s also a link below to a short paper summarising it by Nick Freeland). At best, the PMT is a reasonably effective rationing mechanism, but no more than that. It’s certainly not effective at targeting: the target is missed more often than it is hit. I also provide a link to a recent paper I did on "Rethinking targeting" which argues that coverage is the most important means of increasing the inclusive of families living in poverty: LEAP fails badly on this.
It seems that the results on targeting effectiveness from the World Bank are from 2010, but the PMT was not yet functioning then (or was it?). So, presumably these results were only theoretical. Has there been any subsequent empirical assessment? It would be great if you could share the 2010 targeting review.
However, I’d agree with Gaspar that means testing is very much part of the problem (and, of course the proxy means test is much less effective than a means test, although it can be a lot cheaper to do). The Convention on the Rights of the Child stipulates the Right to Social Security for all children. LEAP - and PMTs - are not the way to guarantee this right. UNICEF’s work in Nepal to promote a universal child benefit seems much more promising.
Stephen KiddSenior Social Policy Specialist
Development Pathways, UK