Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure

Do poor people benefit more or less than the nonpoor from an expansion in access to public services? And do those benefits depend on the existing level of access? Answering these questions is essential to strategies for empowering (or “investing in”) poor people, but the lack of panel data or repeated crosssectional data in poor countries has often made it impossible. This paper proposes a methodology for answering these questions using data from only a single cross-section survey. We argue that the methodology may be useful for monitoring the allocation of public expenditures in a context of decentralization, and we demonstrate this by applying it to local-level data from Bolivia and Paraguay. The results indicate that the marginal benefit incidence is higher (or at least not systematically lower) for the poor than for the nonpoor in education, but this is not the case for many basic infrastructure services. More generally, the poor seem to gain access only once the nonpoor already have high levels of access. This suggests that pro-poor policies must be implemented if the poor are to reap the benefits of gains in access faster.