Working Paper: July 2001

Principles and Approaches to Targeting:
With Reference to the Indonesian Social Safety Net Programs

Sudarno Sumarto, Asep Suryahadi

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Abstract

The potential benefits of accurate targeting are substantial because public expenditures can be concentrated to the needy, thereby saving money and improving program efficiency. However, targeting also entails administrative costs associated with identifying, reaching, and monitoring potential beneficiaries. In addition, there are also potential costs in the form of disincentive costs, stigma costs, and political economy costs. The experience of the recent Indonesian social safety net programs shows that targeting was one of the most difficult problems in the implementation of these programs. As a result, the programs were plagued by the twin problems of undercoverage and leakage.

Table of Contents

I. Benefits and Costs of Targeting

II. Approaches and Mechanisms of Targeting

III. Targeting in the Indonesian Social Safety Net Programs

IV. Measuring the Outcomes of Targeting

V. Lessons Learned from Indonesia's Targeting Experience

VI. Conclusion

References