Séminaire d’économie de Bordeaux

Kibrom Abay

 IFPRI

Incentives, Administrative Capture and Preference Aggregation in Community-Based Targeting

Abstract
Community-Based Targeting (CBT) is widely used for identifying beneficiaries in social protection programs and development interventions, especially in data-scarce settings. Yet, little is known about how community leaders and local implementers respond to financial incentives or how group decisions aggregate individual preferences in CBT. We conduct a cluster-randomized experiment in 180 Ethiopian villages to study the effects of incentive structures and discretion on administrative capture—defined as funds retained beyond benchmark implementation costs—in CBT. Local leaders were tasked with allocating real or hypothetical transfer budgets, with discretion to retain up to 10% as “administrative costs”. We find that financial incentives significantly increase administrative capture, and that capture increases with budget size. Group decisions yield higher appropriation than individual proposals, suggesting implicit collusion rather than prosocial restraint in group-based decisions. Moreover, when real stakes are at play, group outcomes are disproportionately shaped by extreme (outlier) preferences, whereas in hypothetical settings, popular preferences dominate. These findings highlight behavioral mechanisms underlying administrative capture and can inform the design of more accountable CBT systems.


Keywords: Community-based targeting, social protection, resource leakage, elite capture, Ethiopia.
JEL Classification: I38, C93, D73, D71, H53

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