beneficiary identification at the local level, does not provide any guidance on the definition of resource poverty in a way that would ensure the application of the eligibility criteria in a consistent and unambiguous fashion across Malawi.

The targeting impacts of this shortcoming in the program design could be amplified given local perceptions in rural Malawi regarding the number of needy households exceeding the allocated number of coupons. Previous research has hinted at pervasive inclusion and exclusion errors and has shown the likelihood of FISP coupon receipt to increase with household welfare status (Holden and Lunduka, 2012a for the 2005/06 and the 2006/07 seasons; Chibwana et al., 2012 for the 2008/09 season; Ricker-Gilbert et al., 2011 for the 2006/07 season). Leakage in terms of nonpoor population receiving program benefits could have significant economy-wide effects given also the available evidence on the FISP crowding out both commercial fertilizer purchases (Dorward et al., 2008; Ricker-Gilbert et al., 2011) and organic fertilizer use (Holden and Lunduka, 2012b).

Beyond the official allocation of coupons, village chiefs and local leaders have been documented to facilitate coupon sharing arrangements, without exclusively focusing on the neediest (Holden and Lunduka, 2012a). Despite the introduction of open forums, previous studies have highlighted (i) the possibility of these meetings simply serving as a medium for announcing to the village residents a pre-determined list of beneficiaries, and (ii) claims regarding changes in coupon allocations between pre-registration of beneficiaries and coupon distribution, and the ensuing coupon diversion by key stakeholders facilitating the open forum (Dorward and Chirwa, 2013).<sup>11</sup>

# **4 DATA**

This study uses data from the Third Integrated Household Survey (IHS3), collected from March 2010 to March 2011 by the Malawi National Statistical Office, with support from the World Bank Living Standards Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA) project.<sup>12</sup> The IHS3 data were collected within a two-stage cluster sampling design and are representative at the national, urban/rural, regional, and district levels, covering 12,271 households in 768 enumeration areas (EAs), of which 10,038 were rural (628 EAs).

> 11 On personal communication, based on the sub-national data informing his research program on the Malawi FISP, Andrew Dorward also indicated that while most communities hold open forums, a very few report participatory decision making during the open forum. In most cases, the village chief and the local leaders are reported to retain considerable control of coupon allocations.

> 12 The lead author was the point person for the World Bank technical assistance towards the design and implementation of the IHS3 under the LSMS-ISA initiative, which is a household survey program established by a grant from the Bill and Melinda Gates Foundation to provide financial and technical support to governments in SubSaharan Africa in the design and implementation of nationally-representative multi-topic panel household surveys with a strong focus on agriculture (www.worldbank.org/lsms-isa). The IHS3 data and documentation are publicly available through the LSMS website (www.worldbank.org/lsms).

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