Fiscal Decentralization and Targeting of Antipoverty Program in Developing Countries

We study the targeting of antipoverty program under fiscal decentralization in developing countries. Local governments become more important after fiscal decentralization, so it needs analyzing their incentives and behavior in antipoverty program delivery. In some developing countries, local governments' officials are appointed by central government, but elected by local residents in others. The difference of political systems will affect local governments' incentives and behavior, and further leads to different targeting of antipoverty program. This paper argues that large-scale antipoverty program in appointment system is better-targeting, and vice versa in election system through analyzing. Then it provides some suggestions for developing countries.