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Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia

Vivi Alatas, Abhijit Banerjee, Rema Hanna, Benjamin Olken, Ririn Purnamasari and Matthew Wai-Poi

No 18798, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the impact of elite capture on the allocation of targeted government welfare programs in Indonesia, using both a high-stakes field experiment that varied the extent of elite influence and non-experimental data on a variety of existing government transfer programs. Conditional on their consumption level, there is little evidence that village elites and their relatives are more likely to receive aid programs than non-elites. However, this overall result masks stark differences between different types of elites: those holding formal leadership positions are more likely to receive benefits, while informal leaders are less likely to receive them. We show that capture by formal elites occurs when program benefits are actually distributed to households, and not during the processes of determining who should be on the beneficiary lists. However, while elite capture exists, the welfare losses it creates appear small: since formal elites and their relatives are only 9 percent richer than non-elites, are at most about 8 percentage points more likely to receive benefits than non-elites, and represent at most 15 percent of the population, eliminating elite capture entirely would improve the welfare gains from these programs by less than one percent.

JEL-codes: D73 H53 O12 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-dev and nep-sea
Note: PE POL DEV
References: Add references at CitEc
Citations: View citations in EconPapers (34)

Published as Vivi Alatas & Abhijit Banerjee & Rema Hanna & Benjamin A. Olken & Ririn Purnamasari & Matthew Wai-Poi, 2019. "Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia," AEA Papers and Proceedings, vol 109, pages 334-339.

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Journal Article: Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia (2019) Downloads
Working Paper: Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia (2013) Downloads
Working Paper: Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia (2013) Downloads
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