Published on Development Impact

The Regressive Demands of Demand-Driven Development

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There is a frustratingly weak and positive finding in the literature that examines the targeting performance of social funds projects, which, over time, took on many of the characteristics of community-driven development programs and became an important part of the social protection strategy in many countries by funding projects that provide public (and sometimes private) goods requested by communities: they are only moderately pro-poor. This is despite the fact that many well-meaning practitioners are trying their best to target funds to poor areas and poor households within those areas, often using the best data available on the geographic distribution of poverty.

The reasons given in the literature as to why the final incidence of benefits is not strongly pro-poor have usually had something to do with elite capture: differences in preferences between village elites and others; local inequality and elite capture; elites steering benefits towards their kinship and client networks; use of such funds for political gain; and corruption. However, given their demand-driven nature, the beneficiaries of these programs are determined by two equally important processes: (i) who applies; and (ii) who, having applied, gets approved. It seems eminently plausible that at least part of the reason why poor people don’t benefit more from these programs is that they may not be applying for funding in the first place. The extant literature has examined the determinants of being a program beneficiary (i.e. the final funding or project allocations) in great detail, but I know of no studies that decompose targeting performance into applications and, conditional on application, selection.

A recent paper by Baird et al. (2011) does exactly this. Using an unusually rich data set that combines the universe of applications and funding decisions on the second phase of Tanzania’s Social Action Funds (TASAF II) with poverty maps, census data, and voting data for each of the more than 2,000 wards in mainland Tanzania, they find the following:

·         The application process is regressive with project applications substantially more likely to come from richer districts. This pattern is strongly correlated with variation in access to media and information and with political participation across districts, such as voter registration and turnout.

·         The subsequent project approval process is pro-poor, due largely to the pre-determined funding allocations made from the center to the districts.

·         The progressive selection of projects from an initially skewed pool of applications reproduces the familiar finding of moderately pro-poor final funding allocations in the extant literature.

In addition, the authors have data for every household in 100 villages in five districts. These data were collected to assess the impact of a component of TASAF II, under which groups of vulnerable individuals get large grants from TASAF to carry our income-generating activities (such as animal husbandry, milling, tailoring, etc.) they proposed. As such, these are projects that provide private goods to a small percentage of individuals in these villages (please refer to the paper on details of how this component of TASAF II works). The findings at the local level are remarkably similar to those found at the national level:

·         Among households eligible for this component of TASAF II (according to the exogenous vulnerability criteria imposed by the center), less than 50% had ever heard of the program: in fact, ineligible households were significantly more likely to have heard of TASAF. Awareness of TASAF II (which seems necessary to apply) is positively correlated with education, ownership of a radio or phone, attending village meetings, and being related to village elites.

·         Among those who heard of TASAF II, eventual program beneficiaries are poorer, but also still more likely to be politically active and live close to the village center. Again, as at the national level, the targeting criteria imposed by the center is responsible for the fact that the program is pro-poor: there is little evidence of pro-poor selection of beneficiaries within villages conditional on eligibility.

So, there is a decent amount of evidence here suggesting that the requirement that a household or a community has to submit an application in order to become a beneficiary, may in fact be hindering the ability of such programs to reach poor areas and poor households within those areas. The lack of applications from poor households and communities could be due to various factors, among which lack of information, proposed in this paper, is but one. For example, it is possible that poor households (or communities) are aware of the program but are unable to navigate the system to produce valid applications. The paper presents some evidence at the household level suggesting that this may be part of the story: group leaders (i.e. the chairperson, secretary, and treasurer, who hold signatory power over the group accounts) for the proposed income generating activities are substantially more educated, more likely to own phones and radios, and less likely to be poor than the “rank and file” members of these groups. It is likely that having a small number of such individuals among the beneficiaries is instrumental in putting together viable project proposals and navigating the application process.

Another possibility is that households and communities that are aware of TASAF II (and able to apply) nonetheless decide against doing so because of the costs associated with the projects. Many programs, including TASAF II, require that communities contribute a share of the project costs. While this is a reasonable hypothesis, the authors do not find support for it in the data: application patterns are the same for projects that require cost-sharing (infrastructure and public works) and those that do not (vulnerable groups).

Finally, low application rates among the poor might arise if they rationally decide not to apply due to a perceived low probability of being approved. The authors do not find support for this hypothesis, either. As can be seen in the Figure below, approval rates are higher in poorer wards, meaning that, if anything, application rates from these areas should be higher.


Finally, a few thoughts on what these findings might imply for policymakers in charge of designing programs:

·         When possible, geographically disaggregated poverty maps should be used to target initial funds to smaller administrative units – if the funds are aimed to reach the poor.

·         The initial propagation of information about the program (sensitization and outreach), and setting some simple eligibility criteria appear to be particularly important activities over which to consider maintaining some centralized control. Of course, this is subject to the appropriate caveats depending on the broader goals of social funds programs in a decentralized setting.

·         The study confirms findings in the literature with respect to the advantages enjoyed by local elites in decentralized programs, while suggesting a new culprit for this pattern. Despite the fact that community development projects are supposed to be designed to address the needs of the “poor, the marginalized, and the excluded”, these are exactly the groups among whom the awareness of the program is lowest. Furthermore, the importance of civic engagement and political connections permeates the findings: unlike measures of poverty, variables measuring political activity and connectedness increase both the demand-side probability to seek out the program as well as the supply-side probability of selection. While the authors cannot distinguish active ‘informational capture’ by elites from the fact that marginalized groups are simply harder to reach and inform, the informational regressivity that pervades this study motivates a strong focus on outreach efforts in CDD programs.

Community development programs require their potential beneficiaries to be aware of and fully participate in the entire process, but the ability to do so is not equitably distributed across the population. Rather, it is significantly lower among the poor, the vulnerable, and the marginalized. Inducing meaningful participation at the local levels remains the big hurdle for these programs to truly succeed.


Berk Özler

Lead Economist, Development Research Group, World Bank

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