Is Country-system-based Aid Really Better than Project-based Aid? Evidence from Rural Water Supply Management in Uganda

The adoption by donors of the recipient country’s system, rather than a parallel donor system, in implementing aid projects has been highly recommended within the aid community in recent years. However, the assumption behind this policy that using a country’s own system would enhance the recipient’s bureaucratic capability and result in improved public service delivery has yet to be verified. We show in this paper that this expectation does not necessarily fit with the reality, taking the Ugandan rural water supply sector as an example. When bureaucracy itself is in flux in the name of “decentralization,” the unconditional adoption of a country-system approach could underperform when compared to the conventional donor-project approach.