SAGA Proposal: Social Funds

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SAGA Research Proposal:

1.2.4.2 Social Funds

Another way to increase local participation and control is the use of social funds, which has greatly expanded since their inception by the World Bank in 1987. These funds generally are used for education, health, and health-related projects (water and sanitation) that are chosen directly by communities. Social fund projects devolve significant responsibility and budgetary control to communities, thus directly increasing the poor’s power over their own lives. Schools and health posts are by far the most popular projects that communities select, suggesting that there is pent up demand for education and basic health services in poor communities. Because social funds are relatively new, studies of their effectiveness are limited (Newman et al. 2000; Chase and Sherburne-Benz 2000; Sahn and Younger 2000). Given the growing enthusiasm of donors, governments, and stakeholders for social funds, expanding such research would be an appropriate activity under this Agreement. Many questions arise: do local elites capture these efforts and turn them to their own advantage? Is the infrastructure built to reasonable standards, and through a competitive process that ensures cost accountability? Are communities willing and able to finance recurrent costs associated with the social fund projects (that is, will the projects be sustainable)? And to what extent does the newly constructed infrastructure substitute for existing public (or even private) schools, health facilities, etc? The last question points to an additional concern: the potential conflict between local control through social funds, which involves direct relations between communities and donors, and nationally directed efforts at decentralization of the institutions of government. The very aspect of social funds that make them attractive — their direct responsiveness to community demands — may weaken efforts to develop strong and responsible local (but supra-community) governments (Parker and Serrano 2000).

Finally, there may be significant interactions between access to social fund finance and the existing levels of education and health (as well as wealth) in the community. More educated people may be more able to articulate their needs and desires, and to participate more effectively in the implementation of projects. It is important to understand the dynamics of this interaction since they could lead to a situation where a social fund strategy helps better-off communities pull ahead while poorer ones stagnate.

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