Why the poor do not benefit from community-driven development: Lessons from participatory budgeting

Community-driven development (CDD) has been identified as a potent vehicle for poverty reduction. Over 105 countries have adopted CDD projects in the hope that citizen empowerment translates to socio-economic development. But existing evidence is mixed, with some scholars arguing that CDD does not benefit the poor. This paper seeks to contribute to this literature by identifying any differentiated impact to the poor attributable to a CDD project in the Philippines. It draws on the literature on participatory budgeting to argue that participation of the socially excluded groups like the poor in the collective planning and budgeting determines the extent to which empowerment and democratization can be sustained. Using panel data collected in 2003 and 2010, the paper finds indications of elite control based on a decomposition of the profile of participants of village assemblies, which is a critical participatory institution in providing equal access to all members of the community to the deliberations and negotiations. The average participant of such village assemblies tend to be the less-poor household of the community with the participation of the poor dwindling over the years. The difference-in-difference impact estimation also reveals disappointing results for the poor. Although the project improved average household income among the poor, the project failed to enhance the social outcomes for the poor households such as participation in planning process, trust in the government and solidarity. This study adds to the existing literature showing that CDD may fail to effectively target the poor.