This paper examines the targeting efficiency of three large,
nationally implemented poverty reduction programs: (i) the disbursement
of zakat (charitable donations), (ii) microfinance, and (iii) the provision of
health services through the Lady Health Workers Programme (LHWP).
Both zakat and microfinance are “narrow-target” programs, incorporating
mechanisms to identify the poor, while the LHWP is classified as a “broadtarget”
program. This paper evaluates the targeting efficiency of zakat
disbursed through public and private sources, by using data from the
Pakistan Socio-economic Survey (PSES) for 2000/01.
A review of the recent literature on poverty trends shows that
1987/88 proved a turning point for trends in poverty: declining trends in
poverty reversed. Despite some differences in poverty estimates across the
studies reviewed in this paper, the percentage of the population living
below the poverty line was much higher at the beginning of the new
millennium than it had been in the late 1980s. Irrespective of the precise
headcount ratios and methodological differences, most studies agree on
the upward trends in poverty witnessed in the 1990s. Income distribution,
too, has worsened in the last decade. Historically, poverty in Pakistan has
been higher in rural areas than in urban, with relatively high poverty levels
in Sindh and southern Punjab.
A large number of programs and schemes developed to enhance
people's well being, as well as provision of basic facilities, have been
introduced in Pakistan over the last 5 decades. However, almost all these
programs have the following two features in common: (i) inability to
achieve financial targets, with governments cutting down development
expenditure in periods of fiscal adjustment without assessing the costbenefit
of such an action; and (ii) public perception that no real qualitative
change in standards of living, particularly in rural areas, has occurred as a
result.