outside funding and the dynamics of participation in community associations mary kay gugerty the...
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Outside Funding and The Dynamics of Participation in Community Associations
Mary Kay Gugerty
The Evans School, University of Washington
Michael Kremer
Harvard University
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It is a general rule of civil society that its stronger members get stronger. The weaker and poorer members are either unable to organize at all, or they form groups that reflect their weakness and poverty.
Michael Walzer (2002)
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Attempts to increase organization of disadvantaged
Many argue this limits political influence and economic development (Banfield 1958; Putnam 1993, 2000)
International development donors increasingly seek to strengthen associations of poor and disadvantaged
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Criticisms
Professionalization Elite capture
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Establishing causality difficult
Correlation between poverty and low participation could be because:– Low participation inhibits economic
development (Banfield)– Civic groups represent class interests of
advantaged, exclude disadvantaged– Third causal factor: education, personality
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Assessing Impact of Assistance
Correlation between groups’ organizational strength and external assistance could arise because – stronger groups attract more funding– funding leads to stronger organizations– third factor, like able leadership, group
culture
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Correlation between external assistance, socioeconomic status could arise because:
– external assistance attracts members and leaders of higher socioeconomic status
– people of higher status are more successful at securing outside funding
– able leaders are likely to both attract funding and to rise in social status
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Empirical Approach
Take advantage of opportunity created by random phase-in of NGO program to strengthen women's associations in rural Kenya
Compare groups that were supported early with those that had not yet been funded
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Results
Little evidence of increased organizational strength
Increased entry into groups and into leadership positions by – younger, more educated women– women employed in the formal sector– Men
Increased exit – due to conflict– by older women (marginalized, isolated group)
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Outline
Women’s groups in Kenya
Description of project and data
Outcomes
– Agricultural activities, finances, group cohesion, community interaction
– Entry, exit and leadership
Model of group dynamics
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Women’s Groups
Widespread; indigenous roots
Internal Activities– Roscas, emergency assistance, labor
exchange– Income generating projects, agriculture– Insurance role– Savings role (high retention of income)– Social and economic connections
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External Benefits
Contributions to community fundraising events
Campaigns against brewing of illegal liquor, violence against women
Improve household bargaining position of women
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Group Structure
Three unpaid executive officials
Key decisions made by consensus
Executives more educated, but largely primary education
97% of executive are female
20% of members are male, mostly spouses
Few ties to government or political structures
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Project Area
Agricultural area in western Kenya
Poor, low levels of technology Uncultivated land Per capita GDP $328 Estimate for district $170
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Intervention
ICS, Dutch NGO, program
Two components:– Organizational/managerial training– Agricultural inputs and training
Value of funding: – $674 per group ($337 in agricultural
inputs)– $34 per individual
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Selection Procedure and Data
80 candidate women’s groups selected from 100 groups
Eligibility: Pre-existing, agricultural, non-elite
Geographic stratification
40 program groups selected randomly
Comparison groups funded two years later– Anticipation effects?
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Data
Baseline survey undertaken: – pre-intervention data
Funding Post-intervention surveys
– 12 months after first funding– 18 months after first funding
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Outcomes
Agricultural and financial Group cohesion Community interaction Group composition and
leadership
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Potential program rationale, unintendend consequences?
Address underprovision of public goods within group; strengthen group capacity, production?
Increase external benefits?
Crowd out and diversion? Changed incentives for membership,
leadership?
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Agriculture Outcomes (Table 2)
Limited increase in complementary inputs
– Labor, land increase << 140% capital increase– Area cultivated is 14% of potential with inputs
Value of harvest only $18 higher, not significant
No significant increase in group assets
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Use of Inputs
70% of groups reported distributing project seeds to members – 29 % of these gave seeds to every
member
58% of groups distributed fertilizer to members– Regular members no more likely to use
fertilizer at home
– Executive officials 12% more likely to use fertilizer if in program groups
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Group Cohesion (Table 3A)
Program group members report:– improved leadership – more effective meetings
No change in:– attendance rates– assistance to members– rosca activity
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Community Interaction (Table 3B)
No difference in community contributions
No additional visits from other women’s groups
75% more visits from Ministries of Agriculture and Health
Twice as many visits from local government officials
Lower levels of non-program assistance-$11
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Entry into Groups (Table 4)
Twice as many new entrants in program groups Program groups have 4 new entrants; comparison
groups have 2 Short period
New entrants: Proportion with regular income 11 percentage points
higher Proportion married 4 percentage points lower Females more likely to have secondary education Less likely to come from village
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Entry into Leadership (Table 5A)
18 percentage points more likely to have new executive
12 percentage points more likely to have a new member as an executive
Proportion of male executives increases by 4 percentage points
Proportion of female executives with secondary education increases by 4 percentage points
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Entry Payments (Table 5B)
More individuals paid to join 4 new members provided land for
cultivation in program groups, none in comparison
Probability of promoting at least 1 individual to executive who donated land is 8 percentage points higher
But entrance fee paid is low ($3) relative to program benefits ($34), pre-program assets ($11)
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Exit (Table 6)
Overall rate of exit similar, but
Exit for financial reasons is 67% lower
Twice as many members leave due to conflict
Exit rates for women over 50 increase by 2/3
No clear net change in group size
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Unintended redistribution to the more advantaged New entrants and leaders paid far less
than per capita value of NGO assistance, assets built by existing members
Exiting members not compensated for
investment in labor, reinvested profits made over the years
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Implications of Results
Little evidence that program strengthened groups
Weakened role of most disadvantaged
Changed characteristics that made them attractive to funders in the first place
Subsidizing community organizations may involve a tradeoff
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Model of Group Dynamics
Previous results suggest a static analysis may be misleading
Model how groups evolve as old members leave and new entrants are selected
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Main Premises of the Model
People prefer groups that deliver more benefits
Groups prefer members who can contribute more. Correlated with socioeconomic status
Turnover of members over time
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Setup of the Model
OLG model: People live two periods, prime- age and old age
Beginning of each period new prime-age workers can apply, old members choose
Joining a group: fixed opportunity cost of time
Group size fixed at N: N/2 prime-age, N/2 old
Insurance benefits of group: initial productivity Li,p, when old Li,o = Li,p - δ +εi, where δ = average loss in productivity ε = random variation in health
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Setup (continued)
Individual j can produce Lj on her own
Group G can produce Lg + Xg
Lg = Σn/2
Li,p + Σn/2
Li,o
Xg = group-specific productivity
Part of group output distributed equally Continuous distribution of L and X CARA utility function
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Selection into Groups Each period, new prime-aged chose groups to apply to,
old members vote on admissions
Cannot borrow to finance entry fees
Stable matches :
a) no case where a group and an applicant would prefer applicant were in the group
b) no person in a group would be better off producing individually
Equilibria: assignments of people to groups such that all matches are stable
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Steady State Proposition 1: There is cutoff value of Xg, denoted Xc,
such that no group with X < Xc exists in steady state:
all groups have a minimum level of group productivityall groups have a minimum level of group productivity
Proposition 2: There is a steady state equilibrium where- all sustainable groups have N members
- for any two groups i and j, Xi > Xj implies Liavg
> Ljavg
- if fewer spaces than people: cutoff level of productivity, individuals below that level are in no group
Less advantaged people end up in Less advantaged people end up in less productive groups or no groupless productive groups or no group
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Implications of the Model Those of higher socioeconomic status belong to
groups that provide greater benefits, i.e. higher X.
Those of lower socioeconomic status will be in weaker groups or no group.
Even small difference in individual productivity L can lead to large differences in participation
Socioeconomic status and participation can correlate, even if the less advantaged start groups at same rate and have same preferences as the more advantaged
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Can Constitutional Provisions Help? Regulation may limit membership or leadership
disadvantaged groups. But
– Only groups with strong commitment to disadvantaged will make such provisions
– These restrictions can create costly inflexibility
– Hard to make such provisions stick: future members may admit (marginally) more advantaged members.
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Unequal Benefits for More Equal Participation? Model assumes organization deliver benefits
independently of social status
If benefits greater for disadvantaged, joining is less attractive for advantaged
This may allow keeping strength of groups of disadvantaged over long term
Kenyan women’s groups: may have survived because disadvantaged may value insurance more. Intervention provided agricultural inputs that are valuable to advantaged.
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Conclusion
Dynamic nature of participation in organization may lead to situations where disadvantaged have weak organizations or don’t participate at all
Dilemma for development assistance