Precision poverty alleviation policies and macroeconomic fluctuations: Evidence from a quasi-natural experiment in the establishment of national-level poverty-stricken counties

The designation of national-level poverty-stricken counties constitutes a pivotal policy within China's targeted poverty alleviation strategy, though its effectiveness requires empirical verification. This study employs the establishment of these counties as a quasi-natural experiment. Utilizing county-level panel data from 2000 to 2021, we apply the Hodrick-Prescott (H-P) filter method to decompose economic output into trend and cyclical components. Subsequently, the Propensity Score Matching-Difference-in-Differences (PSM-DID) method is used to identify the causal effects of this designation on macroeconomic fluctuations and the efficacy of poverty alleviation. Results indicate that the targeted poverty alleviation policy exerts no significant impact on regional cyclical fluctuations but significantly amplifies the trend component associated with economic growth. Policy implementation elevated the trend component in the treatment group by approximately 9.5 % relative to the control group. This finding persists across diverse identification assumptions and robustness checks. Furthermore, the designation primarily influences macroeconomic fluctuations indirectly through industrial, financial, investment, transportation, and income channels. Heterogeneity analysis further reveals a less pronounced policy effect in eastern regions compared to central and western areas, a more substantial impact in ethnic minority regions compared to non-minority regions, and a more significant effect in high-density population areas relative to low-density areas. However, minimal variation in policy effect is observed across administrative divisions. These findings underscore the critical importance of spatially and demographically targeted implementation of national poverty alleviation policies, thereby facilitating continuous refinement of China's existing poverty alleviation strategy and framework.