agenda contributed to change the fortunes of the social assistance system. Between 2000 and 2005, all social assistance benefits increased in number, size or coverage with growth rates in real expenditure ranging from 6% to 335%. Benefits continued to be mainly targeted to the war veterans, disabled and children and these three categories of beneficiaries together increased in size between 2001 and 2004 to reach about 90% of all beneficiaries and total expenditure. By 2005, the social assistance benefits system included nine different types of benefits and had a total expenditure estimated at 1.7% of GDP and 4.6% of public expenditure (WB 2007).

The stated aim of social assistance benefits in Moldova is to assist the poor and the vulnerable. According to the Social Report 2001 prepared by the former Ministry of Labor and Social Protection: _(1) Social assistance benefits and facilities are provided to persons that find themselves at risk or are unable to make a living. (2) The objective of social assistance is to support persons who temporarily or continuously face difficulties which impede them obtaining necessary conditions for a decent life, helping them to develop their own capacities and competencies for a relevant social functioning. (GoM 2001, p.9, English version)_ Yet, the practice of social assistance has continued to be biased in favor of selected categories of beneficiaries irrespective of wealth status and, to date, none of the benefits are really means tested.<sup>3</sup> The government of Moldova had plans to experiment with means-tested benefits and a few categorical benefits were complemented with means-tests but - _de facto_ - all social assistance benefits continued to be granted according to categorical criteria. The government of Moldova may have been successful in targeting its political constituencies. But has it really addressed its stated intention of improving welfare?

# **4. Key issues**

We are confronted with a retrospective evaluation. There was no design to evaluate social assistance benefits before the program was launched and we cannot rely on a randomized experiment and/or household surveys which were specifically designed for evaluating social assistance benefits. This is the rule rather than the exception in transitional economies. These countries face financial and skills constraints which limit the funds and capacities to undertake a proper evaluation design.

The social program we are evaluating is expected to be affected by most problems which are typical of evaluations of this kind including selection bias and lack of a proper comparison group, unobserved heterogeneity, model endogeneity and measurement error. Selection bias accrues from the fact that the group of households that received social benefits - the treated group - was not randomly selected by the government. This group may be very different in terms of its characteristics from the group of households that did not receive social benefits - the untreated

> 3Benefits for children in age 0-3 and material assistance are supposed to be accompanied by means-tests but in reality the system preselects categories of beneficiaries making the means-test an almost redundant exercise.

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