expected productivity. The authors further demonstrate the presence of meaningful intra-village transfers, suggesting that in the presence of these transfers allocating fertilizer subsidy to more productive households may be a superior selection criterion compared to targeting based on poverty status.

Even if village leaders were optimizing targeting of the poorest community members according to some objective definition of poverty, the effectiveness of their selection will be limited by the information available to them. Although local leaders are immersed in the life of the community, they may not have the same level of detailed information on every household that an enumerator sent to recover this information could retain. Although lack of information is a straightforward and universally plausible constraint on targeting efficiency there is a notable lack of research on the topic. To our knowledge, the only study that tests this information hypothesis is Alix-Garcia et al. (2019) in which the authors find that local leaders actually do provide accurate information on households, but acknowledge that the accuracy of their information may vary by context; for example, their information may be less accurate in larger and more dispersed communities.

In this context, our paper attempts to make a threefold contribution to the literature on targeting by local leaders. First, we contribute to the body of evidence addressing traditional metrics of effectiveness of local leader targeting by answering two questions: i) do they select worse off community members? ii) How well does their selection compare to alternative approaches, including the canonical technical approach of PMT? Second, we attempt to shed light on the process of selection. Specifically, we explore what characteristics and criteria best rationalize local leader led beneficiary selection. This aspect of the paper contributes to the evidence that local leaders may use a different definition of poverty compared to program designer/policy maker. We test whether, in selecting the poorest, local leaders are more likely to rely on information about assets, likelihood of hunger, or subjective perception of immediate need. While assets are likely to capture long-term welfare, likelihood of hunger is a better proxy of current welfare, and perception of immediate need may reflect exposure to shocks. Third, we check whether local leaders rely on accurate information when making targeting decisions: i.e. whether what they know about household’s landholdings corresponds to landholdings as reported by the household.

Another contribution of our paper is in analyzing the effectiveness of targeting by local leaders in the specific context of a public works program. We focus on a program in the Lao People’s Democratic Republic where village heads played an important role in selecting program beneficiaries. Constraints on effective targeting are likely to differ by program type. For example, the likelihood of nepotism may be higher for programs where there are no implicit participation costs (e.g. unconditional cash transfers, food vouchers), compared to programs with strings attached, such as public works programs, especially if working conditions are difficult. In contrast to the workfare setting of our study, much of the existing targeting literature is focused on conditional cash transfers, including work focused on the targeting of health insurance (Alatas et al., 2012), food subsidies (Alatas et al., 2012 and Basurto, Dupas and Robinson, 2019), and fertilizer subsidies (Basurto, Dupas and Robinson, 2019).

We collect detailed welfare data on those who were identified as eligible to participate in the program by the village heads, as well as on a random sample of households from the same village. We also administer a series of ranking exercises to the village heads, aimed to elicit guiding principles for their selection, and to assess the quality of information they rely on. The paper is organized as follows: the next section describes the Road Maintenance Groups program, the process of beneficiary selection and provides 3