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

Lisa Cameron / Manisha Shah (2012)

Key facts

Journal/Publisher
Institute for the Study of Labor
Type of publication
Working paper
Elements of social cohesion
Orientation towards the common good
Cooperation
Geographical focus
Indonesia
Main thematic areas
Conflict & peacebuilding
Political institutions & governance
Development cooperation

Summary

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.

Publication_2012_Lisa Cameron / Manisha Shah

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