ABSTRACT

In many countries, informal sector activities make standard means-testing (income verification) problematic, prohibitively expensive and prone to the danger of excluding the truly needy when attempting to filter out the non-poor. This problem is particularly grave for Russia, which faces a high poverty rate (headcount), with a very large contingent of the population receiving various benefits, and limited means to spend on social protection. In such a situation, improved targeting of social expenditures is imperative.