Who Is Vouching for the Input Voucher? Decentralized Targeting and Elite Capture in Tanzania

Input subsidy programs carry support as
instruments to increase agricultural productivity, provided
they are market-smart. This requires especially proper
targeting to contain the fiscal pressure, with decentralized
targeting of input vouchers currently the instrument of
choice. Nonetheless, despite clear advantages in
administrative costs, the fear of elite capture persists.
These fears are borne out in the experience from the 2008
input voucher pilot program in Kilimanjaro, Tanzania,
examined here. Elected village officials received about 60
percent of the distributed vouchers, a factor that
significantly reduced the targeting performance of the
program, especially in more unequal and remote communities.
When targeting the poor, greater coverage and a focus on
high trust settings helped mitigate these concerns. The
findings highlight the continuing need for scrutiny when
relying on decentralized targeting. A clearer sense of
purpose (increasing productivity among poorer farmers versus
increasing aggregate output) could also enhance the
targeting performance.