Cash Transfers, Targeting and Government Approval: Evidence from Pakistan

This article examines how household-level cash transfers affect political attitudes in Pakistan. Exploiting the locally exogenous eligibility cut-off of the Benazir Income Support Programme (BISP), we estimate the causal impact of programme receipt on satisfaction with the government. We find that beneficiaries report significantly higher satisfaction. However, this effect is not associated with improvements in economic conditions or perceptions of state capacity. Instead, the effect emerges only in communities where the programme has been in place for over two years, coinciding with the shift from discretionary nominations by parliamentarians to proxy-means test–based targeting. The results further indicate that increased satisfaction is driven by households whose inclusion reflects objective eligibility criteria, particularly in constituencies where patronage networks have historically shaped programme access. The pattern is consistent with the idea that rule-based targeting may improve approval among poorer households in politically salient communities, although we cannot fully separate this mechanism from duration of exposure to the programme. Even in weakly institutionalized settings, the adoption of transparent and rule-based social policies can improve citizens’ perceptions of the state.