Multi-tier targeting of social assistance: The role of intergovernmental transfers

Albania provides a small amount of social assistance to nearly 20 percent o f its population through a system that allows some community discretion in determining distribution. This study investigates how well this social assi stance program is targeted to the poor. Relative to other safety net progra ms in low-income countries, social assistance in Albania is fairly well tar geted. Nevertheless, the system is hampered by the absence of a clear, obje ctive criterion to determine the size of the grants from the central govern ment to communes as well as limited information that could be used to imple ment this criterion. Substantial gains in targeting could be achieved if th e central government better allocated transfers to local governments, even holding local targeting at base levels.