Official Sites Related Information August 3, 2006—A program that helps poor people influence development in their communities is gaining new respect as a way of increasing government accountability and fighting corruption, proponents say. Community Driven Development (CDD) gives community groups control over planning decisions and investment resources for development. It also promotes and builds long-term partnerships with local government, non-governmental organizations and others, says Bank Senior Economist Rob Chase. But until recently evidence of the program’s success has been mainly anecdotal, says Chase, partly because CDD’s goals of better social relations, increased citizen empowerment and greater trust in local authorities are “fuzzy” and hard to measure. Now that is changing as grass-roots participation in development is combined with traditional top-down monitoring to measure the success of CDD—and reduce corruption. "The Bank's CDD programs are empowering communities to drive their own development, building better local governance and accountability and building assets - both infrastructure and the institutions critical to their sustainability"--Katherine Sierra, VP, Sustainable Development In addition, new techniques for assessing progress in several countries, including Bangladesh, Indonesia, Romania, the Philippines, Albania, Sierra Leone, and Tanzania, are demonstrating that CDD works even in the riskiest and most challenging environments, according to Daniel Owen, the Bank’s CDD Coordinator. Indonesia Experience In Indonesia, for instance, a Bank-funded project combined CDD with technical analysis to find out whether village road project funds were being lost to corruption. Harvard economist Ben Olken discovered that informing developers of road projects that they would be audited had the effect of reducing missing expenditures by about 8 percent, “more than enough to make these audits cost-effective.” And the threat of an audit was particularly effective in villages where the village head was up for reelection, and where the previous election results suggested that the upcoming election would be close, suggesting that “external monitoring and democratic accountability may be complements,” he says. Olken’s study involved telling randomly selected villages that their road projects would be audited—a generally uncommon practice in Indonesia. 
Harvard economist Ben Olken discovered that informing developers of road projects that they would be audited had the effect of reducing missing expenditures by about 8 percent After the road projects were completed, Olken had engineers dig up core samples in each road to estimate the quantity of materials used. He also surveyed local suppliers to estimate prices and interviewed villagers to determine the wages paid on the project. From these data, he constructed an independent estimate of the amount each project actually cost to build, and then compared this estimate with what the village reported it spent on the project on a line-item by line-item basis. “Since the village must account for every Rupiah it received from the central government, stolen funds must show up somewhere in the difference between reported expenditures and estimated actual expenditures,” says Olken, whose work was funded by the United Kingdom Department for International Development-World Bank Strategic Poverty Partnership Trust Fund. “This method is very good at comparing the level of corruption across villages and estimating the relative differences between them,” he says. Olken says his analysis led to greater understanding of how village dynamics can encourage or prevent corruption and bolstered World Bank efforts to persuade governments to perform audits. Strengthening Local Governments Key Keith McLean, Senior Social Development Economist, says the Bank has found that CDD projects are most effective if local governments are strong enough—and have enough resources—to respond to “bottom up pressure” from community groups. For that reason, encouraging political and financial decentralization has become a key priority of the Bank, he says. “We have become better at working with communities, helping them to articulate their needs and developing their social capital. But increasingly the issue has become ‘What then?’ We have realized that local empowerment needs to be leveraged by local government.” 
Villagers now play a major role in planning projects and also strengthened local governments known Union Parishads (UPs). Programs in Bangladesh have benefited from the success of the Sirajganj Local Governance Development Fund Project (SLGDFP) – a United Nations Development Program-funded initiative to make local government more transparent. Villagers now play a major role in planning projects and also strengthened local governments known Union Parishads (UPs). Under SLGDFP, development funds are paid to UPs directly and their spending is monitored by local communities. The program has proved very successful, with almost no leakage of money and increased accountability within the UPs, says Rahman Siddique, SLGDFP project monitoring advisor. He says financial decentralization and increased community participation has led to efficient services and use of resources. “If we can open up all the information available in local government bodies to the community and implement a strategy where UPs are accountable to the community and all decisions taken in a participatory manner, then all the constraints can be overcome,” he says. Challenges In theory, says McLean, local government should be ideally placed to help CDD projects. Local politicians are generally keen to become involved. They want to deliver new services to their constituents and the funding from donor countries often far exceeds local governments’ own resources. Therefore they can be willing to open up their processes, as required by CDD, to enable the new services to be delivered. However, the reality can be different, he says. The autonomy and strength of local government can vary considerably, affecting its ability to act as a partner. In some countries, such as the Philippines, there can be a strong tradition of political decentralization but one that is held back by poor accountability and weak governance. Elsewhere, as in Eastern Europe, local government can be strong but have operated in a “top-down” environment, with little experience of genuine community involvement in decision-making, McLean says. In some areas, as in parts of Latin America, local government can suffer from being run by local elites, again preventing real community participation. In many parts of Africa, local government can be weak overall, with few participatory structures and few resources. McLean says considerable work may therefore be needed to encourage the decentralization needed for local government to act as a strong partner in CDD projects. Also, this decentralization should be financial as well as political, as in Bangladesh, he says. “What is needed is responsive local government with fiscal freedom. Without fiscal freedom, it can be difficult for local government to operate and its development capacity is restricted. The more autonomous a local authority, the more likely it is to be able to generate sustainable relationships with the communities they serve.” 
In Tanzania, the second Social Action Fund (TASAF II) has concentrated on increasing the role played by both local governments and community groups in projects such as road and school building To overcome such constraints, parallel discussions may have to be held with both national and local government to promote and encourage proper decentralization, says McLean. He says the right environment can be provided, as has been shown in Romania and Tanzania. In Romania, a CDD project is strengthening the capacity of commune governments and community groups to undertake road and water supply projects. This has involved creating Community Investment Advisory Councils to improve relations between local people and the lowest tier of local government. In Tanzania, the second Social Action Fund (TASAF II) has concentrated on increasing the role played by both local governments and community groups in projects such as road and school building. It has given greater power to village councils, the most decentralized form of government. Crucially, it has been accompanied by a parallel local government reform program aimed at improving fiscal decentralization and financial accountability. With this alignment, CDD has far greater likelihood of success and scale, says McLean. |
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