How Effective are Decentralized Anti‐poverty Programs?

Shuai Chen, Mingda Cheng and Jie‐Sheng Tan‐Soo

China & World Economy, 2024, vol. 32, issue 4, 85-113

Abstract: This study examines the effectiveness of China's National Poor Counties (NPC) program, a decentralized anti‐poverty initiative, by analyzing five rounds of individual‐level panel data from 1988 to 2008. The impact of two waves of the NPC program (1994 and 2001) is evaluated utilizing a panel fixed‐effects regression model. The results indicate substantial positive effects, with residents in NPC counties experiencing a 47 percent income increase, 3.1 percent higher employment rates, and a 5.7 percent rise in household expenditure from 1988 to 2008, in comparison with non‐NPC counties. Notably, the program benefited vulnerable populations, dispelling concerns about “elite capture.” The study also reveals that evolving policy focus has played a pivotal role in sustaining the effects of the program over time. The 1994 round prioritized low‐skilled employment, and the 2001 wave emphasized productivity enhancement through skills development. These findings highlight the continued efficacy of decentralized anti‐poverty efforts.

Date: 2024
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