Participation And Poverty Reduction: Issues, Theory, And New Evidence From South Africa

This paper examines the relationship between community participation and the efficacy of interventions designed to reduce poverty. We develop some simple analytics that are used to structure a review of the extant literature and motivate the analysis of the impact of participation on the efficacy of public works interventions in South Africa. These analytics suggest that because communities possess informational advantages unavailable to outsiders, community participation offers the prospect of lowering the cost of antipoverty interventions. In cases where the outcomes of interventions are difficult to measure, community participation is attractive because it is more likely to produce a set of outcomes actually desired by the community. However, this observation should not be taken to imply that these outcomes are desired by all members of the community, nor by those who finance these interventions. These arguments are supported both by a review of the extant literature and also by a multivariate analysis of the impact of community participation on public works projects in South Africa. We find that increasing community participation lowers the ratio of project to local wages, increases the labor intensity of projects that provide community buildings, roads or sewers, and lowers the cost of creating employment and of transferring funds to poor individuals. We find no evidence that community participation increases cost overruns in these projects.