Will no-one rid me of this troublesome PMT?

The original version of this blog appeared on Development Pathways

Anyone who has worked in social protection knows that the thorniest issue of all is that of “targeting”. The recent polemics on these pages about the inadequacy of the Proxy Means Test (PMT) as a “targeting” mechanism have raised the more fundamental question of whether it is in fact the actual concept of “targeting” that is at the heart of the problem.

Amartya Sen began his famous and oft-cited paper on “The Political Economy of Targeting” (1995) like this:

The use of the term “targeting” in eradicating poverty is based on an analogy–a target is something fired at. It is not altogether clear whether it is an appropriate analogy. The problem is not so much that the word “target” has combative association. This it does of course have, and the relationship it implies certainly seems more adversarial than supportive.

Sen also worried that “targeting” treats the recipient as an object rather than as a human being (“The image is one of a passive receiver rather than of an active agent”). And Stephen Kidd, in his “Pathways Perspective” on “Rethinking ‘Targeting’ in International Development” (2013) argued that:

The concept of viewing recipients of public services as “targets” to be hit corresponds well with a neoliberal concept of social policy, in which people receive “assistance” as a form of government charity. It is much less appropriate within a paradigm in which public services are regarded as “entitlements” offered to “citizens”.

These are all fair points. But there is a further objection to the term. The concept of “targeting” carries with it an implicit assumption that accuracy is possible: the supposition is that we are able to hit a target. But such accuracy is, of course, impossible when we are trying to assess the comparative poverty of different households or individuals. There is no accurate way to capture the multiple facets of relative poverty: where a household lives, what it comprises, the age and capabilities of its members, what it owns, what characteristics and skills it possesses, what social bonds it has, and so on. To imagine otherwise is delusional. We need to be honest, and explain to policy-makers that PMT is not a “targeting” mechanism, it is one of several possible “rationing” mechanisms…and not necessarily the best one.

The concept of targeting should properly be reserved for the policy choice of which vulnerable group is to be the recipient of government support, for example the elderly, children, pregnant women, the working age poor. Here, at least some degree of accuracy of identification is possible. It is rather at the next stage that the problems arise: there is a subsequent choice about whether all of this group, or just some of them, should receive the benefit. Much the best solution of course is to provide the assistance universally, or at least only exclude the very wealthiest, as in South Africa’s self-declared affluence testing. But this decision is usually a function of the resources available: if they are inadequate, then some form of rationing will need to be applied to restrict them to just a subset of the group.

There exist a number of options. The major ones (in broadly decreasing order of acceptability, from best to worst) include:

• Eligibility rationing – where eligibility criteria are highly restricted, for example by setting the eligibility age of a social pension very high (e.g. over 70, as in Lesotho), or of a child grant very low (e.g. under 2 years). The advantage of this approach is that it limits the numbers, but is nonetheless universal, which makes it popular, and which allows the eligibility criteria to be gradually expanded over time (as has happened for example with the Child Support Grant in South Africa).
• Geographical rationing – where specific geographic areas are isolated for receipt of the benefit. Examples of this approach would include support to the riverine chars of Bangladesh, or to specific ethnic groups in tribal areas of Vietnam. The problem is that this is sometimes politically difficult, since it may create or exacerbate regional jealousies.
• Random rationing – where beneficiaries are selected by lottery. This is the practice in a number of instances, for example on the SWAPNO programme in Bangladesh. It may seem a bizarre way to allocate social “entitlements”; but it has the advantage that people understand its arbitrariness, and it is at least honest and transparent.
• Community rationing – where communities themselves are asked to ration the benefits of the programme. One advantage of this approach is that community members frequently opt for an inclusive approach, and simply distribute the total amount of the benefits equally among everyone in the community (as for example in Indonesia’s Raskin programme): universalism through the back door. On the other hand, there can also be significant challenges, where selection may reflect existing patterns of social exclusion within communities, or resources may be captured by the more powerful.
• Temporal rationing – where groups of beneficiaries are selected to receive benefits for a short period (often 1 to 2 years), and are then removed from the programme and replaced by a new set of temporary beneficiaries, as occurs for example in Uzbekistan. This is the approach of so-called “graduation” programmes. It may be fair in that it rotates the benefits, but impacts are seriously constrained as a result.
• PMT rationing – where a fallacious veneer of objectivity and transparency is applied to lottery rationing, permitting the selection process to be attributed to a computer rather than to pure chance. There is nothing inherently wrong with this: what is unethical – as we have seen from the evidence presented recently on these pages – is the charade that PMT results in accurate “targeting”.
• Auction rationing – where potential recipients bid against each other for inclusion on a programme, as for example in Bangladesh, where some beneficiaries of the old age allowance have had to pay up-front bribes of up to one year’s worth of benefits to be included. The most common manifestation of such auction rationing is public works programmes, where “beneficiaries” bid their opportunity costs for the privilege of expending valuable calories on hard labour in exchange for a meagre transfer.
• Patronage rationing – where community leaders or other worthies select beneficiaries based on their patronage relationships. Examples of this would include the constituency funds allocated in some Pacific Island states to Members of Parliament, for them to distribute as social assistance to selected constituents. The approach is not “fair”, but it is at least understandable, and transparent in its unfairness.

There is nothing very scientific about the list above, and the order of preference is strictly personal! But it demonstrates that there are other methods than the awful PMT to cut the cake. It may be that if the use of PMT for poverty-“targeting” is presented to policy-makers for what it really is – i.e. as one of many options for rationing limited social resources – then they will pay greater attention to alternative approaches…most of which are actually much better!