Delivering Participatory Development through Foreign Aid Contracts

Abstract

Foreign aid donors deliver project assistance through top-down, highly controlled, bureaucratic systems. Yet, they discuss their work as employing participatory approaches in which the beneficiaries of aid projects are delegated decision-making power over project activity selection and design. This dissertation explores whether and how donors delegate decision-making power to project beneficiaries using contract specifications, including the extent to which this delegation occurs, the variation in specifications for beneficiary decision-making, the conditions under which the delegation occurs, and how contractors respond to the specifications during project implementation. I find that 72% of foreign aid contracts implemented by the U.S. Agency for International Development (USAID) delegate decision-making power, though they never delegate full control over goal setting. Most often, contracts delegate more moderate degrees of decision-making power such as consultation and solicitations of activity ideas within a set of parameters. I find that there are two types of delegated decision-making power: one that specifies decision-making power for recipient government beneficiaries at moderate levels, using collaborative tools that provide the beneficiary decision-maker with leverage over the final activities chosen. The second kind of decision-making power specifies decision-making power for both non-government and government actors at higher levels of decision-making scope, but using less collaborative tools that provide less leverage over final project activity decisions made. This delegated decision-making occurs when the problems that projects address are more complex, and when the recipient country government is less democratic. Local level decision-making is likely used in the face of complexity to identify locally appropriate solutions that can be applied as project interventions. USAID has an explicit goal to strengthen democratic processes and democratic institutions around the world, which likely explains why collaborative decision-making processes that are jointly implemented occur more often with recipient governments that are less democratic. Once decision-making power delegation is specified in the contract, I find that it acts as a floor for decision-making power delegation during implementation in 91% of cases: contractors delegate decision-making power as specified, or more often, than specified. Once beneficiaries provide their decisions about which project activities should be selected and how they should be designed to the contractor, they often influence the project activities selected, though with varying degrees of leverage over decisions based on their ability to block successful project completion. When beneficiaries provide decisions but do not influence project activities, it is typically because there are too many beneficiary decisions to simultaneously accommodate, or due to contract and institutional constraints such as project scope requirements or limited funding. When beneficiaries are not delegated decision-making power, but initiate the sharing of their preferences for project activities directly, they have influence over project activities to the degree that they hold blocking power to prevent contract success. Beneficiary participation in decision-making on aid project activities is occurring, but is conditioned by the aid delivery structure and local powerholders. Contract specifications influence beneficiary engagement in decision-making during project implementation, and often serve as a floor for this engagement.