JBS Vol 25. Num 2. 2023. Article 1 - The Prospect of Proxy Means Test as an Alternative Targeting Mechanism of Safety Net Programs - Evidence from Bangladesh

A high rate of exclusion of the extreme poor in the current safety net programs in Bangladesh exposes the weakness and the inefficiency of the existing targeting mechanism, which necessitates adopting an alternative method. This paper explores the prospect of the Proxy Means Test (PMT) as a better tool for targeting the poorest in developing countries like Bangladesh. Contrary to the assumption of perfect implementation made by existing literature, we estimate the implementation error of the current programs. After factoring out the error due to consumption dynamics from the targeting error, the PMT methodology appeared to be marginally efficient compared to the existing practice with higher coverage and lower targeting errors.