Abstract
The evidence on the effectiveness of participatory development approaches in low-income countries is ambiguous. We randomly vary governance modalities to study elite capture in Ethiopian forest user groups and explore implications for livelihoods of group members. Top-down monitoring and punishment increases consumption and income, and decreases inequality. In contrast, internal monitoring has no effect on livelihoods. Additional heterogeneity analysis, based on observational data, reveals that while top-down monitoring works in groups where forest benefits are unimportant, internal monitoring improves economic outcomes in those groups where forest benefits are an important component of rural livelihoods. This suggests that participatory approaches work if targeted participants have strong incentives to voluntarily contribute effort.
Highlights
Efforts to engage local communities in development interventions and government reform programs are increasingly common in low-income countries
Top-down refers to the top-down monitoring and punishment treatment, Reward refers to the top-down monitoring and reward treatment, and Internal refers to the internal monitoring treatment by group members
The idea of involving local communities in development initiatives, decision-making and monitoring of public service delivery has gained a lot of traction in international development circles
Summary
Efforts to engage local communities in development interventions and government reform programs are increasingly common in low-income countries. Community-driven development interventions have become popular, devolving prioritysetting as well as financial and operational control over public good provision to local stakeholders. Local beneficiaries are made responsible for monitoring front-line service providers, or management of natural resources. These approaches are expected to overcome information and incentive constraints, and create a sense of ownership. An additional expected benefit is that participatory approaches may empower the poor––especially marginalized social groups such as women and youths. Participatory projects often involve efforts to build local capacity, reform institutions, and training of beneficiaries. The effectiveness and efficiency of participatory approaches remains controversial and ambiguous. 1
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