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Data, discretion and institutional capacity: Evidence from cash transfers in Pakistan

Muhammad Haseeb and Kate Vyborny

Journal of Public Economics, 2022, vol. 206, issue C

Abstract: Administrative data is key to many government functions; but generating and maintaining it is costly and challenging in low-income countries. We study an overhaul of public assistance in Pakistan that created a national database of household assets and used the data to means-test cash transfers, eliminating discretion in their allocation. We use difference-in-differences and regression discontinuity approaches to quantify the effect of this reform. Favoritism and transfers to wealthy households dropped; we estimate that the welfare benefits of the reform were seven times as large as its costs. The reform improved public perceptions of social assistance and helped create a robust institution that survived political transitions.

Keywords: Targeting; Cash transfers; Favoritism; Administrative data (search for similar items in EconPapers)
JEL-codes: D73 H53 I38 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.jpubeco.2021.104535

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