This paper is divided into two parts. In the first part, Thandika Mkandawire discusses the forces behind the shift from universalism toward selectivity in using social policies to combat poverty in the developing countries. In the second part, a review of the lessons from such policies, he considers the administrative difficulties of targeting in the poor countries, the political Economic bases of policy choices, and the consequences of policy choices for individual incentive. Mkandawire pays special attention to cost-effectiveness, because advocates of selectivity in the fight against poverty raise it as the main argument in its favour.