Studies examining expenditure policies of local governments (panchayats) in India have found evidence of failure to target benefits to poor regions or households. This mis-targeting can be either in the form of diversion to local elites, or forms of political clientelism whereby benefits are distributed opportunistically to help generate votes for incumbents. In the context of West Bengal, most of the evidence indicates clientelism, rather than elite capture, to be the dominant source of mis-targeting. This suggests that a transition to more centralized programmatic distribution of benefits which reduces scope for local officials to exercise discretion may improve targeting.
This paper examines anti-poverty targeting improvements that could realistically be achieved from such a transition.