Does demanding contributions from local beneficiaries work?

Here’s a question for all you development research types (especially the randomistas).

A lot of community-level capital development projects these days seem to involve a requirement that the beneficiary community make a contribution towards the development. Sometimes this is in the form of free labour, other times it is financial. So, for example, a new bore hole and pump may cost around $20,000; the donor will pay the bulk but ask that the community stump up $1,000*; communities that cannot or will not stump up do not get the new well. The theory, as I understand it, is that if the community have had to stump up then they will value the development more, be more likely to take care of it etc, and the development project will be more successful as a result.  Conversely also, communities who do not stump up are assumed to not sufficiently want a new well, and thus the money is better spent elsewhere.

The second part of that theory has the obvious flaw that some communities may simply be unable to afford $1,000, but still it is a very seductive idea for directing aid to those areas which will benefit from it and value it most, and also increasing the likelihood of sustainability. If I were in charge of a programme offering such capital development grants I think I’d incorporate the requirement in my programme’s design.

But, does it really work? Or does the requirement for a local contribution simply slow down disbursement, miss out some needy communities altogether, and save the donor a negligible amount of money (unless so few communities can afford the contribution they don’t even spend the entire programme’s allocation)?

In particular I wonder whether if the community had to pay $1,000 for the new well then they might only value it at $1,000. Such a valuation might not even be completely irrational if the community sees other neighbouring communities also getting the new well for the same price (i.e. the wider programme effectively establishes the local price), and, following previous practice by the same and other donors  in the area, the community may consider it a reasonable chance that if in 5-10 years time the pump is broken, some donor will offer to repair it for another token contribution of $1,000.

Moreover, assuming this is now a ‘community-owned’ well it is unlikely that it provides value to any one individual of over $1,000, especially when labour is so cheap, and the primary water fetchers (women) have less political influence, and thus individual incentives for maintenance may be dulled. Cohesive, well led communities can of course overcome these challenges, but they are the exception that proves the rule of the tragedy of the commons from which communal investments often suffer. And investing in local community governance is a long, expensive undertaking which does not sit well alongside a quick in-and-out capital development programme.

Has anyone ever done any research on this issue? The relatively long time periods required to judge sustainability might be one challenge, but I could also imagine how it might be possible to measure earlier proxy indicators of likely success within a couple of years of installation. Anecdotal  evidence of success in NGO projects is not without interest in this area, but it might suffer from a question of attribution in relation to this measure versus other forms of support that the NGO provides as part of the integrated package.

Please enlighten me in the comments.

* I’m not a water engineer. These prices may be completely unrealistic. The exact numbers are not important to my basic point.

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3 responses to this post.

  1. You really raise an excellent point here. We do require contributions from local beneficiaries running our program, which sometimes excludes worthy organizations. I guess the key here may be to find the “right price”, ie the price where it is significant enough for it to be valued, but low enough to be affordable. While we haven’t seen any research in this area, we have found that over time, those that contribute really take more ownership and are more committed to achieving intended results.

    Reply

  2. I’ve been working in Mexico for the past two years on small scale alternative technologies projects and I often wondered the same thing.
    Even when talking about real small scale projects, when we request a participation from the “beneficiary”, especially in terms of money it always deters some people from participating. And sometimes I wonder if those people would not be the ones that need the help the most?

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  3. I agree that the wider problem is “investing in local community governance is a long, expensive undertaking which does not sit well alongside a quick in-and-out capital development programme.” Your example (rural water supply) is a clear one where there is need for some sort of ongoing permanent support from outside the community (technical, financial, conflict resolution etc) and any “quick in-and-out” project like this has a high chance of failure if it does not consider this (see http://wp.me/p1jV1a-46). Again, I would agree that “cohesive, well led communities can of course overcome these challenges, but they are the exception that proves the rule” – some in the water sector are referring to these as ‘islands of success’ to acknowledge that they aren’t widely representative.

    However, you are also right that a certain level of demand (which translates into an actual willingness to contribute to ongoing operation and maintenance) is also essential. I don’t think the debate is settled about whether an initial contribution is a good proxy for long-term demand. Ned Breslin from Water for People is a good example of someone who thinks that making this a financial contribution rather than an in-kind/labour contribution is a much better proxy for long-term demand, but I haven’t yet seen rigorous evidence on the question. (http://nedbreslin.tap.waterforpeople.org/rethinking-hydro-philanthropy)

    My current research is trying to better understand how communities in Mali already organise regular collective fundraising for community activities, to see if this helps us assess how willing and able they are to contribute long-term to other common resources such as water supplies, or at least could be considered along with other possible proxies for this long-term demand.

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