The targeting effectiveness of Egypt’s Food Subsidy Programme: Reaching the poor?

Abstract

In Egypt, the Food Subsidy Programme (FSP) contributes greatly to social stability, yet there is academic and political pressure to reform the system to prioritize the effective targeting of the poor. This has been particularly so since the 2011 Egyptian revolution, and in the light of claims by the government and international organizations that the programme is relatively expensive and ineffective in targeting the poor. Accordingly, the ability to measure the programme’s targeting performance is crucial, not least to assess the targeting outcome of this anti‐poverty intervention. Most previous studies of the Egyptian FSP address the challenges of exclusion and inclusion errors exclusively from an econometric approach. However, in this study a mixed approach method is developed to better explain the programme and to explore how its governance structure might play an important role in determining its effectiveness. This method generates both a statistically reliable measure of the magnitude of the targeting performance as well as a greater depth of understanding of the programme’s effectiveness in achieving targeting outcomes. Additionally, understanding the actual targeting mechanism should help policy‐makers improve its effectiveness, and ultimately support a comprehensive reform to build an effective social protection system.