Within projects, community scorecard approaches can be used to monitor progress. In contrast to citizen report cards, these approaches involve a discussion at the community level under the guidance of a facilitator who collects information on project progress and implementation to provide immediate feedback to those overseeing the project. Further enhancing the role for demand-side approaches in governance, community-driven development involves giving communities or locally elected bodies direct control over the decision making, management and use of development funds (See Box 11).

# **<u>Box 11: Community Driven Development</u>**

<mark>In Indonesia, a 1997 survey of 48 villages found that less than 3 percent of village development requests proposed through the government’s development planning system received funding. The Kecamatan Development Program (KDP), begun in 1998, emphasized participatory appraisals for project selection with financing provided by a combination of village and local funding and direct central government support. These features help to ensure that local priorities were the key to setting project prioritization. In the KDP, project budgets, financing and procurement decisions are discussed publicly and displayed on village information boards, each village has an independent committee to oversee contracts and implementation, and journalists and NGOs are invited in to act as watchdogs. In addition, there is an anonymous complaints mechanism which channels concerns to project authorities. KDP projects that met high local demand with close local oversight and involvement produced savings of between 25 to 56 percent over conventional infrastructure projects and carried economic rates of return ranging from 33 to 83 percent (Wong and Guggenheim 2005).</mark><sup>27</sup> <mark>The World Bank’s Uttar Pradesh Swajal project is another example of using community-driven approaches as part of an effort of reform to ensure cost recovery for maintenance and partial cost-recovery for capital costs in water and sanitation. Under the project, resources were transferred to rural communities which procured materials, services and works themselves. NGOs assisted with community mobilization and private firms provided technical design specifications, inspection and monitoring. 92 percent of water supply schemes and 100 percent of latrines constructed under the project remain fully functional (World Bank, 2006b).</mark> Output-Based Aid provides an attractive vehicle to reduce the potential development impact of failures of governance. OBA is a strategy for using explicit performance-based subsidies to support the delivery of basic services. It involves delegating service delivery to a contractor, under contracts that tie disbursements to the services or outputs actually delivered (Kenny and Mumssen, 2007). The outputs defined are ‘technology neutral’ (delivery of electricity services of a given quality to a given community) rather than technology specified. As such, the OBA process is less susceptible to corrupt agents designing project specifications in such a way as to favor a particular bidder. The process is also likely to limit cases where unnecessary or unsustainable projects are undertaken because they provide greater opportunities for corruption. The outputs of an OBA project (water or power connections, a pothole-free road) are also easily monitored, and payment is withheld until outputs are achieved. As a result, even if corruption does occur in OBA projects, the risk that it significantly reduces the development impact of the financing is limited. An OBA project supported by the World Bank in Dakar, Senegal, provides on-

> 27 Similarly, community-based construction of schools in Zambia and Mauritania cut costs by one half to two thirds over national competitive bidding approaches –although some considerable part of this saving was due to lower architectural standards (Theunynck, 2006).

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