Assessing the Frontiers of Ultrapoverty Reduction: Evidence from Challenging the Frontiers of Poverty Reduction/Targeting the Ultra-poor, an Innovative Program in Bangladesh

This article uses household panel data to provide robust evidence on the effects of BRAC’s (Building Resources across Countries) Targeting the Ultra-poor (TUP) program in Bangladesh. We use alternative treatment-comparison pairs; in addition to BRAC’s own classification, we exploit type 1 errors in assignment in BRAC’s selection process to create a second treatment-comparison pair. This allows us to estimate the program effects on the target group, not contaminated by mistargeting. To address selection on unobservables, we implement heteroskedasticity-based identification and two recent estimators based on matching and propensity score reweighting. The results show that participation had significant positive effects on food security, clothing, shoes, livestock, and cash savings, but there is weak or no evidence of an impact on the number of household durables and assets and indicators of health and women’s empowerment. The effects on the poorest of the poor (the target group) may be different from the effects on an average participant in the TUP program. When one takes into account the differences in initial conditions, the effects of the TUP program on the poorest of the poor are much larger (as measured by the program effect normalized by the initial mean value of an outcome), which suggests that the TUP program would have had a larger impact with better targeting.