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Cameron, L., Shah, M. (2012). Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia. IZA Discussion Paper 6736

Cash transfer programs can provide important financial support for poor households in developing countries and are becoming increasingly common. However the potential for mistargeting of program funds is high. This paper focuses on the social consequences arising from misallocation of resources in close knit communities. We find that the mistargeting of a cash transfer program in Indonesia is significantly associated with increases in crime and declines in social capital within communities. Hence poorly administered transfer programs have a potentially large negative downside that extends beyond the pure financial costs that have been the focus of the literature to date.

Authors

Cameron, Lisa

Lisa Cameron is the Director of the Monash Centre for Development Economics (MCDE). She is an empirical development economist, focusing predominantly on Indonesia, with some work on China. Her research often incorporates the techniques of experimental economics. Projects she is currently working...

Shah, Manisha

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