municipalities are required by law to have an administrative committee that includes elected representatives of beneficiaries, the mayor, another local official, and a representative from the Ministry of Health.

In addition to this administrative committee, each community has an elected VL mothers' committee. It is this committee, which has a fair degree of discretion over decision making (Instituto Apoyo and the World Bank 2002), that determines who the beneficiaries are, the timing of deliveries and, to a degree, what commodities are distributed. Despite its name, the VL program is not confined to the distribution of milk or even milk substitutes. In some case cereals or a combination of commodities are distributed in lieu of, or in addition to, milk products. Priority is given to households with children 6 years of age and under, as well as to households with pregnant or lactating women. Once these first-tier beneficiaries are attended to, second-tier beneficiaries (children aged 7 to 13, and people with tuberculosis) may participate. Within these categories, priority is based on need.

There have been a number of excellent recent studies on the distribution of social expenditures in Peru and of VL in particular. For example, Ruggeri Laderchi (2001) uses one of the data sources employed in the current analysis - a 1997 household survey - to illustrate the overall distribution of food transfers, as well as their impact on food consumption and nutrition. She finds that the transfers are slightly progressive although the poorest 40 percent of households received only 46 percent of total transfers. However, she also found that, at the margin, food transfers were entirely spent on food and that if _and only_ ifhousehold income was treated as endogenous, VL program participation increased standardized child growth by 0.7 standard deviations. Using a different methodology, Younger (2002) also confirms the general pattern of progressive distribution and finds that the increases in coverage between 1994 and 1997 improved this targeting.

A recent Public Expenditure Tracking Survey (PETS) followed the budget trail from the central government to the beneficiaries (Instituto Apoyo and the World Bank 2002, World Bank and Inter-American Development Bank 2002). The study found that there was appreciable variation between communities regarding the timing of delivery, the commodities chosen, and the administrative fees charged. Virtually all the funds released by the center were transferred to municipal VL administrative budgets and further down to the level of the Mothers' Committees with only some documented small-scale leakage in the allocations. The PETS study did find, however, that there were discrepancies between the commodity allocations reported by the committees and by the household. They could not account for a quarter of the total product transferred, though the majority of the unexplained gap is found in urban districts (particularly provincial capitals).' I The PETS study also claimed leakage or dilution in the sense that children did not always receive the milk that is obtained by the household. However, not only is this a difficult topic to quantify, the welfare interpretations of this so-called leakage differ from the leakage in the public expenditure allocation chain. As argued in _2_