Page 6 - HKUST IEMS Spring 2018 Newsletter

DESIGNING A POVERTY REDUCTION STRATEGY - CHINA AND
AFRICA'S EXPERIENCES
Photo by Samuel Vigier / Flickr. CC. https://flic.kr/p/c3ix1b
China has achieved remarkable progress in poverty reduction
since the early 1980s. More than 800 million people living
under US$1.9 a day have been lifted out of poverty and
China’s contribution to reducing the rate of global poverty
exceeded 70 percent. However, with the slowdown of
economic growth and increase of income inequality, over
time, the accuracy of targeting has deteriorated and the
measured impact of the programs on rural income growth has
declined. China needs to reform its targeted poverty reduction
strategies to enable the poor to benefit more from poverty
reduction interventions. In November 2013, President Xi
Jinping proposed the strategy of “precision poverty alleviation”
during his visit to western Hunan, and the strategy has
become a significant part of China’s effort to end extreme
poverty by 2020. In his academic seminar, Sangui Wang
(Renmin University of China) summarized the main policies
and practices implemented under this strategy in recent years
and discussed the progress made and the challenges that this
effort faces.
Precision poverty alleviation aims to eradicate extreme
poverty of under $2.3 dollars a day by 2020 by targeting
poor households and individuals as opposed to promoting
regional development of poverty-stricken areas. Precision
poverty alleviation includes accurate identification, assistance, The study also found that greater conflict between groups can
management and assessment through which China has been
able to identify 29.48 million poor households with a total
population of 89.62 million as targets for poverty alleviation
programs in 2013 – a figure that dropped to 43.33 million
by the end of 2016. China has seen a dramatic reduction in
poverty since the reform which has been in part, a result of
fast and sustained economic growth, specifically, agricultural
growth. Targeted poverty alleviation efforts have also
helped to narrow the gap between different regions and the
establishment of a social security system in rural areas since
2007 has accelerated economic and social development
of poverty stricken areas in China. However, the high
administrative cost and coordination challenges involved in
delivering these precision poverty programs has led to over
investment in some areas of China which in turn produces
negative effects as the poor are no longer incentivized to
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work. Additionally, China’s unique
political system and institutional
regimen renders these precision
poverty programs difficult to duplicate
in other developing countries.
In his academic seminar, Imran Rasul
(University College London) presented
research on the role of delivery agents
in the delivery of poverty alleviation
programs in Western Uganda. The
study identifies the delivery agent's
social ties to potential recipients and the
social context in which they operate as
the key determinants of their behavior.
Many development organizations use delivery agents to allocate
scarce resources across recipients. These agents often have
social ties to some recipients and not others, which can lead to
biased allocations. Rasul studies these issues in the context of
an anti-poverty program in Western Uganda. A total of 4,741
farmers from 168 villages were surveyed with regards to their
knowledge and adoption of improved seeds and modern
techniques. BRAC (an NGO), offers a program delivered by
locally recruited agents tasked to sell improved seeds to farmers
and train poor farmers in modern techniques.
The study found that delivery agents were significantly more
likely to target households to which they are socially tied than
those in rival groups, a distinction exacerbated in villages where
inter-group conflict is most salient.
enhance targeting within groups by delivery agents (parochial
altruism). Such behaviors will potentially skew the allocation
of the program and therefore, need to be taken into account
when designing programs, recruiting delivery agents and
incentivizing agents. Development programs that use locally
hired agents need to account for the network structure of the
agents they employ. This network structure not only includes
their social ties and connections to their “in-group”, but also the
groups they are not connected to.
Academic Seminar, “Accurate Household
Targeting: China’s New Anti-Poverty
Strategy” by Sangui Wang (Renmin
University of China) on 2017.09.27
Video and slides available at
http://iems.ust.hk/targeting
Academic Seminar, “Delivery Agents,
Social Ties and Group Identity” Imran
Rasul (University College London) on
2017.09.27
More information available at
http://iems.ust.hk/rasul