State Information Capacity and the Targeting of Welfare Programs

• In Event: Evolving Governance Strategies in Policymaking in China

Abstract

The targeting efficiency of means-test welfare programs worldwide is often compromised by two types of information distortion. On the demand side, fraudulent documentation may be submitted, allowing individuals to receive benefits they are not entitled to. On the supply side, government officials may manipulate welfare information based on personal interests or values. This paper argues that the rapid development of digital technology has the potential to reduce the demand- and supply-side information distortion by enhancing state information capacity. To support this argument, we examine a Chinese anti-poverty policy where program coverage has actually decreased despite relaxed eligibility criteria over the past two decades. Drawing from a panel dataset of 294 Chinese cities (2009-2019), a national survey of over 10,000 economically disadvantaged respondents (2015-2017), and a series of qualitative interviews, we present compelling evidence to confirm the impact of digital reform and elucidate the underlying mechanisms.

Author

• Youlang Zhang, Renmin University of China