Sangui Wang

Regional Poverty Targeting in China

We evaluate the effectiveness of regional targeting in China’s large-scale poverty alleviation program begun in 1986 by analyzing a panel data set of all counties in China for the period 1981–1995. Estimates of models of poor county designation and poverty fund allocation and newly defined targeting gap and targeting error measures show that political factors have affected targeting and that leakage has increased while coverage has improved. Only one of the three main programs is progressive. Growth model estimates find that poor county designation increased incomes per capita by 2.28% per year during 1985–1992 and 0.91% during 1992–1995. These results are relatively robust to redefining control groups using propensity-score matching methods.

China's poverty statistics

Abstract Chinas official poverty statistics show a dramatic reduction in poverty from 31% of the rural population in 1978 to 3% in 2000. We evaluate possible sources of bias in these estimates and conclude that the official statistics underestimate rural poverty and overstate the speed of poverty reduction. Direct measures of nutritional outcomes support the contention that poverty is more widespread than suggested by official statistics. Priority should be given to constructing new statistics to accurately measure urban poverty. The method for calculating county income per capita, a key policy variable affecting official poor county designation, is ad hoc and subject to political influence.