PARTICIPATION AND POVERTY REDUCTION: ISSUES, THEORY, AND NEW EVIDENCE FROM SOUTH AFRICA

This paper examines the relationship between community participation and theefficacy of interventions designed to reduce poverty. We develop some simple analyticsthat are used to structure a review of the extant literature and motivate the analysis of theimpact of participation on the efficacy of public works interventions in South Africa.These analytics suggest that because communities possess informational advantagesunavailable to outsiders, community participation offers the prospect of lowering the costof antipoverty interventions. In cases where the outcomes of interventions are difficult tomeasure, community participation is attractive because it is more likely to produce a setof outcomes actually desired by the community. However, this observation should not betaken to imply that these outcomes are desired by all members of the community, nor bythose who finance these interventions. These arguments are supported both by a reviewof the extant literature and also by a multivariate analysis of the impact of communityparticipation on public works projects in South Africa. We find that increasingcommunity participation lowers the ratio of project to local wages, increases the laborintensity of projects that provide community buildings, roads or sewers, and lowers thecost of creating employment and of transferring funds to poor individuals. We find noevidence that community participation increases cost overruns in these projects.