– The purpose of this study is to examine whether the village development fund (VDF) program reduces poverty in terms of income and expenditure.
– The authors use cross-sectional data that are collected from 361 households in 15 villages in the rural district of Sukhuma of Champasak province in 2012 and use regression for analysis.
– The estimate of the empirical model that is used for the econometric analysis is based on the model constructed by Coleman (1999). This study finds that VDF program has a positive impact on household income and expenditure but that the impact is statistically insignificant.
– The authors conclude that the VDF program has a minimal impact on poverty reduction in the study area.
– Policy-maker should be aware that promotion of the VDF program might not reduce poverty in terms of income and expenditure.
– This finding might have significant impacts on poverty reduction strategy of Lao PDR.
– It is the first study to investigate the impact of the VDF program on poverty in Lao PDR.
