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Community-driven development is an approach to development that emphasizes community control over planning decisions and investment resources. Over the past decade, it has become a key operational strategy for many national governments, as well as for international aid agencies, with the World Bank alone currently supporting more than 190 active community-driven development projects in 78 countries. Community-driven development programs have proven to be particularly useful where government institutions are weak or under stress. This paper examines what the evidence shows about the utility of community-driven development programs for helping governments improve the lives and futures of the poor. The paper also addresses recent critiques of the community-driven development approach. The paper makes three main arguments. First, community-driven development offers governments a useful new tool for improving the lives of the poor. The empirical evidence from evaluations confirms that community-driven development programs provide much needed productive economic infrastructure and services at large scale, reasonable cost, and high quality. They also provide villagers, especially the disadvantaged, with a voice in how development funds are used to improve their welfare. Second, community-driven development programs are not a homogeneous category, and it is important to acknowledge the differences between national, on-budget, multi-year programs, and off-budget programs. And finally, community-driven development works best and achieves the greatest results when it is part of a broader development strategy that includes reforms to governance, investments in productivity, and integration with efforts to improve the quality of public service delivery.

Access of Poor to Social Services --- Citizen Engagement --- Communities and Human Settlements --- Community Development and Empowerment --- Community Driven Development --- Community-Driven Development --- Disability --- Economic Assistance --- Education --- Educational Sciences --- Health Care Services Industry --- Hydrology --- Impact Evaluations --- Industry --- Inequality --- Local Governance --- Macroeconomics and Economic Growth --- Poverty Reduction --- Public Service Delivery --- Rural Infrastructure --- Services and Transfers to Poor --- Social Development --- Social Protections and Labor --- Water Resources

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This paper reports an experiment in over 3,000 Indonesian villages designed to test the role of performance incentives in improving the efficacy of aid programs. Villages in a randomly-chosen one-third of subdistricts received a block grant to improve 12 maternal and child health and education indicators, with the size of the subsequent year's block grant depending on performance relative to other villages in the subdistrict. Villages in remaining subdistricts were randomly assigned to either an otherwise identical block grant program with no financial link to performance, or to a pure control group. We find that the incentivized villages performed better on health than the non-incentivized villages, particularly in less developed areas, but found no impact of incentives on education. We find no evidence of negative spillovers from the incentives to untargeted outcomes, and no evidence that villagers manipulated scores. The relative performance design was crucial in ensuring that incentives did not result in a net transfer of funds toward richer areas. Incentives led to what appear to be more efficient spending of block grants, and led to an increase in labor from health providers, who are partially paid fee-for-service, but not teachers. On net, between 50-75% of the total impact of the block grant program on health indicators can be attributed to the performance incentives.

Health and Economic Development --- Education and Economic Development --- Government Policy