Evaluating Social Funds: A Cross-Country Analysis of Community Investments

Introduced in Bolivia a little over a decade ago, social funds have become a key community-led poverty reduction tool. A departure from traditional government-sponsored approaches, social funds encourage communities and local institutions to take the lead in identifying and carrying out small-scale investments, generally in social infrastructure such as schools, health clinics, and small-scale water supply and sanitation. The social fund model has proved to be a dynamic, replicable approach, easily adapted and scaled up in diverse countries around the world. In Latin America, Africa, the Middle East, Eastern Europe, and Asia, social funds have now absorbed close to $10 billion in foreign and domestic financing. Despite their popularity, the effectiveness of social funds as a mechanism for improving welfare has remained largely unmeasured. This study is the first systematic cross-country impact evaluation of social funds using survey data and accepted evaluation methodologies. The research, carried out in Armenia, Bolivia, Honduras, Nicaragua, Peru, and Zambia, addresses four fundamental questions: Do social funds reach poor areas and poor households? Do social funds deliver high-quality, sustainable investments? Do social funds affect living standards? How cost-efficient are social funds and the investments they finance, compared with other delivery mechanisms? The result of important new World Bank research, this book will be of interest to social policy practitioners and analysts, to academics and students of development, and to anyone interested in current thinking on poverty reduction strategies.