Post Offices, Pensions and Computers: New Opportunities for Combining Growth and Social Protection in Weakly Integrated Rural Areas

Abstract

"India's efforts in targeting a wide range of social protection measures towards different categories of poor people at first glance appear to be a model for other countries as they prepare their own Poverty Reduction Strategies. However, implementation constraints 'especially in areas weakly integrated into economic institutions and infrastructure' are severe. After reviewing briefly the complexities of targeting and delivery in India, the paper examines why there is an apparently inexorable trend towards an increasing number (of increasingly complex) government schemes for transferring resources to the poor, how they are affected differently by misappropriation, and how and why implementation constraints are particularly severe in weakly integrated areas. This paper argues that over-elaborate targeting militates against local transparency and gives local officials too much discretion, and so is part of the problem. It suggests that cash transfers paid through certain channels (e.g. the Post Office) for specific purposes such as pensions and allowances are less corruptible than many 'in kind' transfers. They may help in reducing under-nutrition and stimulating the local food economy by reducing demand deficits and merit greatly increased funding. Stressing simplicity of targeting and automaticity of delivery, the paper suggests it may be better to identify delivery systems that work, and then, with certain safeguards, design schemes around them, than design schemes incorporating the latest concepts of poverty reduction and targeting, which then prove problematic in delivery. This discussion has to be located within the prospects for enhanced automaticity of transfers now offered by computerisation."