Targeting Inputs: Experimental Evidence from Tanzania

Xavier Gine, Bernardo Barboza Ribeiro and Ildrim Valley

No 9013, Policy Research Working Paper Series from The World Bank

Abstract: Input subsidy programs (ISP) often have two conflicting targeting goals: selecting individuals with the highest marginal return to inputs on efficiency grounds, or the poorest individuals on equity grounds, allowing for a secondary market to restore efficiency gains. To study this targeting dilemma, this paper implements a field experiment where beneficiaries of an ISP were selected via a lottery or a local committee. In lottery villages, the study finds evidence of a secondary market as beneficiaries are more likely to sell inputs to non-beneficiaries. In contrast, in non-lottery villages, the study finds evidence of displacement of private fertilizer sales yet no elite capture. The impacts of the ISP on agricultural productivity and welfare are limited, suggesting that resources should be directed at complementary investments, such as improving soil quality and irrigation.

Date: 2019-09-16
New Economics Papers: this item is included in nep-agr, nep-eff and nep-exp
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