This paper contributes to the long-standing debate on
the merits of decentralized beneficiary targeting in the
administration of development programs, focusing on
the large-scale Malawi Farm Input Subsidy Program.
Nationally-representative household survey data are
used to systematically analyze the decentralized targeting
performance of the program during the 2009–2010
agricultural season. The analysis begins with a standard
targeting assessment based on the rates of program
participation and the benefit amounts among the
eligible and non-eligible populations, and provides
decompositions of the national targeting performance
into the inter-district, intra-district inter-community,
and intra-district intra-community components. This
approach identifies the relative contributions of targeting
at each level. The results show that the Farm Input Subsidy Program is not poverty targeted and that the
national government, districts, and communities are
nearly uniform in their failure to target the poor, with
any minimal targeting (or mis-targeting) overwhelmingly
materializing at the community level. The findings are
robust to the choice of the eligibility indicator and the
decomposition method. The multivariate analysis of
household program participation reinforces these results
and reveals that the relatively well-off, rather than the
poor or the wealthiest, and the locally well-connected
have a higher likelihood of program participation and,
on average, receive a greater number of input coupons.
Since a key program objective is to increase food security
and income among resource-poor farmers, the lack of
targeting is a concern and should underlie considerations
of alternative targeting approaches that, in part or
completely, rely on proxy means tests at the local level.