Do local officials know something we don't? Decentralization of targeted transfers in Albania

Albania provides a small amount of social assistance to nearly 20% of its population through a system which allows a degree of community discretion in determining distribution. This study indicates that relative to other safety net programs in low-income countries, social assistance in Albania is fairly well targeted to the poor. Moreover, the poverty targeting exceeds that which could be expected on the basis of proxy indicators of targeting alone; communes appear to be using local information unlikely to be obtained on the basis of a questionnaire or formula. This remains the case conditional on the level of funding allocated from the central government. (C) 2002 Elsevier Science B.V. All rights reserved.