Original title: Policy Gains or Household Need? The Allocation Logic of China's Dibao Program
Haojie Liu, Jiyuan Ling, Zihan Lin · September 2026
When aid is limited, should it go to the families who need it most, or to those who would gain the most from it? Researchers studied China's Minimum Living Standard Guarantee, known as DibaoChina's cash assistance program for poor households, formally called the Minimum Living Standard Guarantee., to see which rule it follows. They estimated how much families would gain in consumption and education, and compared that to who actually entered the program. They found that expected gains barely matter for who gets picked. Instead, the program focuses on current hardship. Lower income, an older adult in the home, and less education for the household head consistently give families higher priority. In short, Dibao chooses people based on signs of poverty and vulnerability, not on who would get the largest boost from the aid.
Imagine a school with a handful of scholarships. One rule gives them to students who would boost their grades the most; another gives them to students with the weakest grades. Watching who gets a scholarship does not reveal which rule is in use, because the same student can be both struggling and capable of improvement. In this paper the same problem appears in China's cash assistance program, and the researchers solve it by measuring how much each household would gain, then comparing that with who actually receives help — the program picks the weakest, not the improvers.
For families in poverty, this determines whether aid reaches the most vulnerable or those whose consumption and schooling would rise most. The findings show China's Dibao program is aligned with vulnerability, not with measurable gains — a signal to policymakers that distributional targeting and impact targeting are genuinely different choices in social assistance.
It does not establish which allocation rule produces better real-world outcomes; the gains are predicted from the outcomes and information observed in the data, not experimentally measured. It also holds local program capacity fixed, so it does not explain geographic variation in priorities or funding.
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Policy Gains or Household Need? The Allocation Logic of China's Dibao Program — Haojie Liu, Jiyuan Ling, Zihan Lin
Abstract licence: CC0
Explanation generated by Synthesis from the abstract — it is not the original paper. This is a preprint, so it hasn't necessarily been peer reviewed.