BISP achieves first position worldwide in targeting performance

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ISLAMABAD: Benazir Income Support Programme (BISP) has been ranked top among globally acclaimed unconditional cash transfer programmes through the Revised Proxy Means Test (PMT) Formula.

“The simulated results show that using the revised PMT formula will substantially increase targeting performance and 60.2 percent beneficiaries will be from the bottom quintile, as compared to 48 percent in the old formula of 2010, while 87.5% would be from the bottom 2 quintiles as compared to 75 percent previously – i.e. a remarkable increase of 12.5 percentage points,” an official statement said.

This is a simulated result but once the National Socio-EconomicRegistry (NSER) update is completed and the administrative data validates this percentage, it would bring BISP to the top rank among globally acclaimed unconditional cash transfer programmes. “We have been continuously putting efforts to ensure transparency in the programme, and becoming the pride of Pakistan,” BISP Chairperson Marvi Memon said.

“I am pleased that the efforts have borne fruit and we have moved from being number five (in 2010) to number one (in 2018).” She hoped that the increased targeting performance would lead to enhance and focus poverty eradication efforts. In 2016, the BISP started an extensive consultative process, with the support of global experts, which led to the revision of the PMT formula with several additional features to improve its performance.

These features included improved welfare indicator, excluding non-verifiable indicators, location effect and interaction effects. BISP Secretary Omar Hamid Khan said that he considered it as yet another success of the BISP team, adding the entire staff and management has continuously put efforts for the betterment of the BISP family.

He said that this exercise showed how BISP was engaged in testing all its efforts through piloting and simulations before field experience to remove any policy glitches in future. “The revised PMT formula bases poverty measures on expenditure per adult equivalent (instead of per capita) since it takes into account household demographic structure in the calculation of the welfare aggregate.”

Moreover, the previous PMT formula included indicators of household head’s educational attainment and children’s enrollment in a school that are not easily observable and verifiable. Hence, the updated formula excludes them and includes an indicator of adults’ literacy, which is less prone to measurement error and misreporting. Further, it has been observed that geographical location is an important determinant of poverty.

To capture these effects, the PMT formula now includes indicators of urban status, according to the definition used by the Pakistan Bureau of Statistics. The formula also includes indicators of agro-climatic zones of Pakistan. This is expected to reduce the rural bias which was observed in the previous formula.

The previous formula was allocating the same weight to demographics, dwelling characteristics, durables and productive assets in the calculation of the PMT score for all households of Pakistan, irrespective of their characteristics or location. The revised formula incorporates interactions between urban status and agro-climatic zones, and these interactions are significantly better predictors of consumption.