Exclusion by Design: the effectiveness of the Proxy Means Test

In recent years, the proxy means test (PMT) has become the predominant targeting mechanism for social assistance schemes in developing countries. It has many powerful advocates and claims that it ‘can accurately and cost-effectively target the chronic poor’ are common. Yet, these claims are not reflected in the evidence nor in the experience of many communities where the PMT is implemented.

Exclusion by design: an assessment of the effectiveness of the proxy means test poverty-targeting methodology – published jointly by the ILO and Development Pathways and authored by Stephen Kidd, Bjorn Gelders and Diloá Bailey-Athias – reviews the recent evidence on the PMT mechanism. The paper, downloadable below, demonstrates that the PMT has very high targeting errors – usually more than 50% – and is arbitrary in its selection of beneficiaries of social security schemes. It is also unpopular in communities where it is perceived to act as a lottery. The paper builds on a much earlier report released by Australian Aid on the PMT which can be accessed here.

Given the spread of the PMT – and the advocacy behind it – Development Pathways believes that it is important for policymakers to understand fully the strengths and weaknesses of the mechanism. Therefore, over the next few months we hope to publish a series of studies on the PMT mechanism and build a webpage dedicated to act as a knowledge hub on the PMT. As always, our focus will be on setting out the evidence and debunking myths so that we can ensure that policymakers are fully informed about the consequences of their decisions, if they choose to adopt a PMT.