Evaluating anti-poverty policy efficiencies in China: meta-frontier analysis using the two-stage data envelopment analysis model

Purpose - This study examines the relative efficiencies of anti-poverty policies implemented in 28 Chinese provinces. Design/methodology/approach - This study uses meta-frontier undesirable dynamic two-stage data envelopment analysis. The authors divide the poverty reduction process into two stages: agricultural production and poverty reduction. Public expenditure is the input for the second stage, and the population below the poverty line is the undesirable output. The authors compute the efficiencies (overall efficiency, efficiency of each stage and the efficiencies of individual inputs and outputs) using meta-frontier analysis for the 28 provinces. Findings - The results show that: (1) a significant imbalance exists between the eastern and western regions in terms of input-output efficiencies; (2) the poverty reduction stage generally fared better than the agricultural production stage did. In particular, most provinces saw increases in poverty reduction efficiencies between 2013 and 2017; (3) the place-based poverty relief policies introduced in recent years are effective at reducing the poverty rate and reaching the government-set goals and (4) while disposable income has increased steadily over the past few years, income inequality has been exacerbated. Research limitations/implications - The results show that: (1) a significant imbalance exists between the eastern and western regions in terms of input-output efficiencies; (2) the poverty reduction stage generally fared better than the agricultural production stage did. In particular, most provinces saw increases in poverty reduction efficiencies between 2013 and 2017; (3) the place-based poverty relief policies introduced in recent years are effective at reducing the poverty rate and reaching the government-set goals and (4) while disposable income has increased steadily over the past few years, income inequality has exacerbated. Originality/value - A large amount of attention and public resources are devoted to fighting poverty and associated market failures in China. The extant literature focuses either on the agricultural production itself or the relationship between human capital and productivity levels. Making use of recent developments of the DEA method, the authors propose a new framework for evaluating the efficiencies of the poverty reduction process. Such a framework has the advantage of giving researchers and policymakers a more detailed diagnosis with regard to the components in the endeavor to eliminate poverty and providing useful information for policymakers to optimize public funds use. Methodologically, the framework is flexible enough to be employed for future research in similar appraisals, at different geographic and scale aggregation levels, for public projects including but not limited to poverty reduction.