# 4.2 Sources of Variation

We know relatively little about what causes variation in the extent to which CDD projects achieve their desired outcomes. We do know that design factors such as the size of the block grant and the number of block grant cycles influence the types of subprojects that are selected and that this, in turn, creates variation in outcomes such as economic welfare and access to basic services (including improvements in human development outcomes and in the quality of interactions with local governments). As is true for all complex intervention, implementation quality and contextual compatibility are also likely to be key factors (see below) (Woolcock 2022).

However, there have been very few research designs that allow us to tease out systematically how and why such variation occurs.<sup>41</sup> As noted earlier (Section 4.1), there is a need for greater clarity in aligning project design with theories of change that clearly outline projects’ intended outcomes in terms of specific aspects of inclusion, resilience, cohesion, and process legitimacy. Projects can choose multiple design and implementation routes to reach a similar objective and, therefore, we can expect significant variation among operations of a particular “sub-type” – i.e., those that aim to improve village infrastructure and therefore access to basic services or those aiming to improve consumption or income. A research agenda that would allow us to assess how, under what circumstances, and for whom “CDD works” will need to explore how variation in design and in the quality of implementation can lead to very different outcomes (within a specific sub-set of operations with the same overall objectives so that we are comparing like with like).

Three sets of factors may affect variation in impacts. First, t _he impact of design choices_ beyond poverty targeting of investments, size of block grants, and number of project cycles needs to be better understood – particularly as it relates to social inclusion, cohesion, resilience, and process legitimacy. One such source of design variation is the extent to which CDD programs choose to align with local government planning and budgeting processes. This can be in terms of the volume of resources available for programing at the subnational level, the extent to which local governments play a role in the selection and co-funding of such investments, the composition of the local institutions responsible for implementing and overseeing subproject activities, the role of budget transparency measures put in place by local governments, or the extent to which they leverage local government performance grants or incentives. Design choices in this area would be expected to significantly influence process legitimacy and resilience outcomes – yet they remain under-analyzed.

Another source of variation is the type and role of local institutions in CDD projects. There are significant differences in the way in which local institutions (village committees, project specific committees) are selected, strengthened through training, given decision-making autonomy, required to enforce program rules, and held accountable for their decisions. All of these factors (and others) may lead to very different outcomes in terms of the effectiveness and sustainability of these institutions.

Facilitation is critical in this regard. Sources of differential impacts may include: (i) the ratio of facilitators to the size of the community; (ii) skills and experience requirements for facilitators (including language skills in remote and conflict-affected areas, level of expertise for dealing with more complex aspects of

> 41 A notable exception is Ensminger (2017), which used a comparative review of the KDP project in Indonesia and the ALP project in Kenya to identify key differences in project design that shaped the nature and level of corruption in each project.

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