Overview of U4 Issue on corruption in community-driven development

Community-driven development is a widely employed development strategy for empowering people to choose their own development priorities, to select their own project leaders, and to monitor the implementation of their projects. One aim of CDD is to lower the level of corruption by increasing monitoring through community participation. Realizing this aim relies on two key assumptions. First, CDD is supposed to be more transparent than alternative development models due to reduced information asymmetries between beneficiaries and project staff. Second, villagers should be actively engaged and monitor the performance of those to whom they have delegated these responsibilities.

The U4 Issue examines two CDD projects, the Arid Lands Project in Kenya and the KDP/PNPM project in Indonesia. These projects had strikingly different corruption rates, even though the countries in which they operated had similar corruption perception rates at the beginning of the projects. This paper examines the project design differences that may explain this variation. The Kenyan villagers consistently confronted a wall of silence regarding project specifications and expenditure data. This lack of information, together with poor training about their rights, affected their ability to choose projects and leaders, to monitor leaders and staff, and to blow the whistle about suspected irregularities. Transparency was also a problem in the Indonesian project. However, a key difference is that the Indonesian project took bold steps to fight for more openness. This variation points toward differences in the management culture at the top of the projects.

Main lessons

Four key lessons for preventing corruption in community-driven development projects emerged from this research.

1. Tone at the top matters: the top management of the Indonesian project took anti-corruption seriously, which created an organizational culture that demonstrated with actions, not just rhetoric, that they were serious about reforms and open to external criticism that might help them fight corruption.
2. The Indonesian project succeeded in reducing corruption because it avoided critical hotspots of government corruption, including the use of civil servants as facilitators and engineers.
3. Staff in the Indonesian project had no discretionary decision-making powers in choosing project villages, and competition was a core principle of project elements.
4. Transparency mechanisms functioned better in the Indonesian project and villagers were more able to access information about projects in order to monitor them. In contrast, the Kenyan project failed on all four of these lessons, and as a result, corruption was rampant in the project.

In 2016, U4 partnered with Dr. Michael Nest, an independent consultant with expertise in community development, and German Development Cooperation (KfW) to put into practice the insights from this research. U4 worked with ARIS, The Community Development and Investment Agency of the Kyrgyz Republic, to design a training seminar and manual for use by ARIS trainers working with local communities benefiting from ARIS funds. This six-hour training seminar is designed to help prevent corruption in community-driven development projects, and was tailored to the local context.