Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia

47 Pages Posted: 21 Jul 2012

See all articles by Lisa A. Cameron

Lisa A. Cameron

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; IZA Institute of Labor Economics; J-PAL

Manisha Shah

UCLA Department of Public Policy; NBER

Abstract

Cash transfer programs can provide important financial support for poor households in developing countries and are becoming increasingly common. However the potential for mistargeting of program funds is high. This paper focuses on the social consequences arising from misallocation of resources in close knit communities. We find that the mistargeting of a cash transfer program in Indonesia is significantly associated with increases in crime and declines in social capital within communities. Hence poorly administered transfer programs have a potentially large negative downside that extends beyond the pure financial costs that have been the focus of the literature to date.

Keywords: cash transfer programs, crime, mistargeting, social capital

JEL Classification: O12, O15, I38

Suggested Citation

Cameron, Lisa A. and Shah, Manisha, Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia. IZA Discussion Paper No. 6736. Available at SSRN: https://ssrn.com/abstract=2114916

Lisa A. Cameron (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=744

J-PAL ( email )

66 bis avenue Jean Moulin
Paris, 75014
France

HOME PAGE: http://www.povertyactionlab.org/cameron

Manisha Shah

UCLA Department of Public Policy ( email )

Box 951656
Los Angeles, CA 90095-1656
United States

HOME PAGE: http://publicaffairs.ucla.edu/manisha-shah

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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