TARGETING MEASURES IN ANTI-POVERTY PROGRAMS

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In 1986 the government put forward a major rural poverty reduction

initiative with the objectives of stimulating economic development in poor

areas and lifting the bulk of the rural poor out of poverty. This initiative

was reinforced in 1994 when the ‘Eight-Seven Poverty Reduction Plan’ was

launched. The aim of this was to bring 80 million rural poor out of poverty

in seven years (1994–2000). In this section we discuss the details of the

key targeting mechanisms used in PRC to meet these goals, before later

considering their effectiveness.

The key characteristic of the poverty reduction program has been its

regional targeting; in other words up to relatively recently all poverty

reduction funds from the central government were targeted at defi ned

geographical regions and were aimed directly at the poor resident within

these units. Counties remained the basic unit for state poverty reduction

investments until 2001. The central government first designated poor

counties and then channeled all the anti-poverty funds to these poor

counties through different government departments and state-owned

banks. Four organizations – the Leading Group for Poverty Reduction

(LGPR), the Agricultural Bank of China, the National Planning and

Development Commission, and the Ministry of Finance – were central

in the delivery and management of government poverty reduction funds.

Each organization used its own administrative system to channel poverty

alleviation funds from the central government to the provincial governments

and then to the county governments. The rules and criteria adopted by these

organizations for fund distribution and project selection have formed the

basis for targeting within poor counties, although these were not always

transparent or followed closely.