Pakistan’s poverty alleviation approach, as outlined in the Poverty
Reduction Strategy Paper (PRSP), consists of sustained high economic
growth with an emphasis on human resource development, governance and
targeting the poor and vulnerable. The PRSP has also identified pro-poor
sectors for poverty-related expenditures including roads and highways,
education, health, rural development, food subsidies, rural electrification,
law and order and justice. Under the Fiscal Responsibility Law, it is obligatory
for the government of Pakistan to protect expenditures on these
sectors at around 4.5 per cent of GDP (GOP 2003a). Although most of the
PRSP interventions can be categorized as ‘broadly targeted’, there are also
some narrowly targeted interventions of the government to transfer
benefits directly to the poorest of the poor, including zakat disbursement
and the food support program. These transfers are needed to help those
who would not otherwise benefit from growth: the extremely destitute, the
unemployed, the sick and the aged. However, the extent of the benefits to
the poor from targeted programs has always been in some doubt. This
chapter focuses on the targeting efficiency of two large poverty reduction
interventions that are implemented nationally; a pure income transfer, the
zakat scheme based on the Islamic concept of charity, and the provision of
preventive health facilities on the doorstep, the Lady Health Worker
(LHW) program. Zakat is a ‘narrowly targeted’ program, which aims
to have some mechanisms for the identification of the deserving poor
(mustahiqueen),1 while the LHW program, a major health intervention, is
a ‘broadly targeted’ program without a specific targeting mechanism. We
focus on the targeting efficiency rather than on the overall poverty impact
of these schemes. An original contribution of this study is that it evaluates
the targeting efficiency of zakat disbursed through both public and private
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sources, separately, by using primary data from the 2000–01 Pakistan
Socio-Economic Survey (PSES).
The rest of the chapter is organized as follows. The second section discusses
national poverty trends and gives some information on broadly
defined pro-poor government expenditures. The third section considers evidence
on zakat in detail. The fourth section discusses the Lady Health
Worker program and the final section draws some conclusions