allocated only a subset of the coupon package that they were legally entitled to constitutes the first deviation of the program targeting from the government guidelines. This finding is in line with previous analytical work on the program (Dorward et al., 2010; Ricker-Gilbert el al., 2011; Holden and Lunduka, 2012a).

Coupon resale is a legitimate concern but results show that coupon resale is insignificant at less than 1 percent, which conforms to earlier research on the 2006–2007 season (Ricker-Gilbert et al. 2011).<sup>13</sup> As such, the concern for coupon resale is not considered significant here, and while there are other issues in use (gifting, loss or theft), when households do receive a coupon, the vast majority (93 percent) do redeem it. Although they redeem the coupon, the subsidies input can still be shared as a result of a combination of factors, including informal arrangements— perhaps between local leaders and recipients—that make coupon receipt conditional on sharing, or previously established protocols employed via social networks and that allows for households to share risk (Fafchamps and Lund 2003). Of those that receive and redeem the fertilizer coupon, 18 percent share the fertilizer for no immediate compensation, and of those receiving and redeeming the maize coupon 16 percent share the seed. When they do share, they tend to share about half of what they receive (47 percent for fertilizer and 55 percent for maize seed) suggesting some sort of agreed-to sharing rule.

# **5 APPROACH TO TARGETING PERFORMANCE ANALYSIS**

Given the ambiguity regarding what constitutes “resource poverty,” Section 5.1 considers a range of plausible FISP-eligibility indicators for the purpose of testing the robustness of our results to the choice of the eligibility indicator. Sections 5.2 and 5.3 present two alternative methodologies that are available for decentralized targeting performance assessment. Each method identifies the relative contribution of targeting (i) across districts, (ii) within district, across communities, and (iii) within district, within communities towards overall targeting performance.<sup>14</sup> Following the presentation of the decomposition frameworks, Section 5.4 showcases results from a multivariate regression exploring the correlates of FISP participation and whether they are in line with the resource poverty targeting nature of the program.

> 13 Since coupon resale is considered illegal, the incidence of coupon resale as captured through household surveys is likely to be the lower bound for the actual incidence.

> 14 The work presented in Section 5.2 and 5.3 build on the two-layer decomposition framework presented in Galasso and Ravallion (2005), and Stifel and Alderman (2005). The proofs for the three-layer decompositions presented in our paper are available upon request. Our empirical approach attempts to follow as closely as possible the design of the FISP. The data, however, do not allow for feasible calculations of targeting at the village level. The lowest level of disaggregation available is the enumeration area (EA) as defined for the purposes of the 2008 Population and Housing Census, which on average consists of 200 to 300 households or 3 to 4 villages. The potential for heterogeneity across villages within an enumeration area is recognized but is not considered significant. The term “community” is used in subsequent discussion to refer to our lowest level of disaggregation, i.e. the EA.

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