A Review of the Targeting System in Georgia : Proposed Reform Options

This paper first reviews the performance of the current targeting system and recommends improvements to the existing PMT formula. One implementation issue we identified is the inconsistency in how monetary and nonmonetary values are treated when ca...

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Main Author:	World Bank
Format:	Report
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	SOCIAL ASSISTANCE TARGETING SOCIAL PROGRAMS PROXY MEANS TEST BENEFICARY POVERTY ALLEVIATION TARGETED SOCIAL ASSISTANCE
Online Access:	http://documents.worldbank.org/curated/en/584461593145535348/Caucasus-Social-Protection-and-Jobs-TA-A-Review-of-the-Targeting-System-in-Georgia-Proposed-Reform-Options http://hdl.handle.net/10986/34089

id	okr-10986-34089
recordtype	oai_dc
spelling	okr-10986-340892021-05-25T09:57:05Z A Review of the Targeting System in Georgia : Proposed Reform Options World Bank SOCIAL ASSISTANCE TARGETING SOCIAL PROGRAMS PROXY MEANS TEST BENEFICARY POVERTY ALLEVIATION TARGETED SOCIAL ASSISTANCE This paper first reviews the performance of the current targeting system and recommends improvements to the existing PMT formula. One implementation issue we identified is the inconsistency in how monetary and nonmonetary values are treated when calculating the PMT score. The practice has been to calculate the score based on monetary variables (income, social benefits package, and utility expenditures) at current nominal prices, which have inevitably inflated the predicted consumption. As the PMT formula was estimated at 2013 prices, the recommendation to correctly implement the current PMT formula would be to deflate all monetary variables to 2013 prices. Second, to further improve the poverty targeting accuracy, the paper presents the updated PMT model estimation and discusses the benefits and cost of transitioning to the new PMT formula. The empirical analysis is based on the 2018 HIES collected by the National Statistics Office of Georgia (Geostat), the latest available to the team at the time of the analysis. The remainder of this note is organized as follows. Section two looks at the performance of the current PMT model to identify key areas of possible improvements. Section three develops alternative estimates and proposes a new PMT formula, comparing its theoretical performance with that of the current one. This is followed by a discussion of the implementation of the formula in the following years to avoid problems encountered with the current approach. Section four goes further to make a more radical proposal to consider moving to an ‘hybrid’ approach combining an income test with the PMT, highlighting the advantages of the approach and the steps needed for its development and implementation. A final section provides a summary of key recommendations for the immediate, short, and medium term. 2020-07-13T20:59:47Z 2020-07-13T20:59:47Z 2020-06-25 Report http://documents.worldbank.org/curated/en/584461593145535348/Caucasus-Social-Protection-and-Jobs-TA-A-Review-of-the-Targeting-System-in-Georgia-Proposed-Reform-Options http://hdl.handle.net/10986/34089 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Other Social Protection Study Europe and Central Asia Armenia Azerbaijan Georgia Moldova
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	SOCIAL ASSISTANCE TARGETING SOCIAL PROGRAMS PROXY MEANS TEST BENEFICARY POVERTY ALLEVIATION TARGETED SOCIAL ASSISTANCE
spellingShingle	SOCIAL ASSISTANCE TARGETING SOCIAL PROGRAMS PROXY MEANS TEST BENEFICARY POVERTY ALLEVIATION TARGETED SOCIAL ASSISTANCE World Bank A Review of the Targeting System in Georgia : Proposed Reform Options
geographic_facet	Europe and Central Asia Armenia Azerbaijan Georgia Moldova
description	This paper first reviews the performance of the current targeting system and recommends improvements to the existing PMT formula. One implementation issue we identified is the inconsistency in how monetary and nonmonetary values are treated when calculating the PMT score. The practice has been to calculate the score based on monetary variables (income, social benefits package, and utility expenditures) at current nominal prices, which have inevitably inflated the predicted consumption. As the PMT formula was estimated at 2013 prices, the recommendation to correctly implement the current PMT formula would be to deflate all monetary variables to 2013 prices. Second, to further improve the poverty targeting accuracy, the paper presents the updated PMT model estimation and discusses the benefits and cost of transitioning to the new PMT formula. The empirical analysis is based on the 2018 HIES collected by the National Statistics Office of Georgia (Geostat), the latest available to the team at the time of the analysis. The remainder of this note is organized as follows. Section two looks at the performance of the current PMT model to identify key areas of possible improvements. Section three develops alternative estimates and proposes a new PMT formula, comparing its theoretical performance with that of the current one. This is followed by a discussion of the implementation of the formula in the following years to avoid problems encountered with the current approach. Section four goes further to make a more radical proposal to consider moving to an ‘hybrid’ approach combining an income test with the PMT, highlighting the advantages of the approach and the steps needed for its development and implementation. A final section provides a summary of key recommendations for the immediate, short, and medium term.
format	Report
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	A Review of the Targeting System in Georgia : Proposed Reform Options
title_short	A Review of the Targeting System in Georgia : Proposed Reform Options
title_full	A Review of the Targeting System in Georgia : Proposed Reform Options
title_fullStr	A Review of the Targeting System in Georgia : Proposed Reform Options
title_full_unstemmed	A Review of the Targeting System in Georgia : Proposed Reform Options
title_sort	review of the targeting system in georgia : proposed reform options
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/584461593145535348/Caucasus-Social-Protection-and-Jobs-TA-A-Review-of-the-Targeting-System-in-Georgia-Proposed-Reform-Options http://hdl.handle.net/10986/34089
_version_	1764480083651723264

A Review of the Targeting System in Georgia : Proposed Reform Options

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