Building State Capacity : What Is the Impact of Development Projects?

Although research has established the importance of state capacity in economic development, less is known about how to build that capacity and the role of external partners in the process. This paper estimates the impact of a typical development project designed to build state capacity in a low...

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Main Authors:	Di Maro, Vincenzo, Evans, David K., Khemani, Stuti, Scot, Thiago
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	STATE CAPACITY GOVERNANCE DECENTRALIZATION PERFORMANCE-BASED FINANCING
Online Access:	http://documents.worldbank.org/curated/undefined/972301638988752613/Building-State-Capacity-What-Is-the-Impact-of-Development-Projects http://hdl.handle.net/10986/36694

id	okr-10986-36694
recordtype	oai_dc
spelling	okr-10986-366942022-03-01T16:46:17Z Building State Capacity : What Is the Impact of Development Projects? Di Maro, Vincenzo Evans, David K. Khemani, Stuti Scot, Thiago STATE CAPACITY GOVERNANCE DECENTRALIZATION PERFORMANCE-BASED FINANCING Although research has established the importance of state capacity in economic development, less is known about how to build that capacity and the role of external partners in the process. This paper estimates the impact of a typical development project designed to build state capacity in a low-income country. Specifically, it evaluates a multilateral development bank project in Tanzania, which incentivized investments in local state capacity by offering grants conditional on institutional performance scores. The paper uses a difference-in-differences methodology to estimate the project impact, comparing outcomes between 18 project and 22 non-project local governments over 2016–18. Outcomes were measured through two rounds of primary surveys of nearly 500 local government officials and nearly 3,000 households. Over the course of the project, measured state capacity improved in project areas, but due to comparable gains in non-project areas, the project’s value-added to change in state capacity is estimated to be zero across all the dozens of relevant variables in the surveys. The data suggest that state capacity is evolving in Tanzania through endogenous changes in trust and legitimacy in the country rather than from financial incentives offered by external partners. 2021-12-09T13:42:39Z 2021-12-09T13:42:39Z 2021-12 Working Paper http://documents.worldbank.org/curated/undefined/972301638988752613/Building-State-Capacity-What-Is-the-Impact-of-Development-Projects http://hdl.handle.net/10986/36694 English Policy Research Working Paper;No. 9875 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Africa Eastern and Southern (AFE) Tanzania
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	STATE CAPACITY GOVERNANCE DECENTRALIZATION PERFORMANCE-BASED FINANCING
spellingShingle	STATE CAPACITY GOVERNANCE DECENTRALIZATION PERFORMANCE-BASED FINANCING Di Maro, Vincenzo Evans, David K. Khemani, Stuti Scot, Thiago Building State Capacity : What Is the Impact of Development Projects?
geographic_facet	Africa Africa Eastern and Southern (AFE) Tanzania
relation	Policy Research Working Paper;No. 9875
description	Although research has established the importance of state capacity in economic development, less is known about how to build that capacity and the role of external partners in the process. This paper estimates the impact of a typical development project designed to build state capacity in a low-income country. Specifically, it evaluates a multilateral development bank project in Tanzania, which incentivized investments in local state capacity by offering grants conditional on institutional performance scores. The paper uses a difference-in-differences methodology to estimate the project impact, comparing outcomes between 18 project and 22 non-project local governments over 2016–18. Outcomes were measured through two rounds of primary surveys of nearly 500 local government officials and nearly 3,000 households. Over the course of the project, measured state capacity improved in project areas, but due to comparable gains in non-project areas, the project’s value-added to change in state capacity is estimated to be zero across all the dozens of relevant variables in the surveys. The data suggest that state capacity is evolving in Tanzania through endogenous changes in trust and legitimacy in the country rather than from financial incentives offered by external partners.
format	Working Paper
author	Di Maro, Vincenzo Evans, David K. Khemani, Stuti Scot, Thiago
author_facet	Di Maro, Vincenzo Evans, David K. Khemani, Stuti Scot, Thiago
author_sort	Di Maro, Vincenzo
title	Building State Capacity : What Is the Impact of Development Projects?
title_short	Building State Capacity : What Is the Impact of Development Projects?
title_full	Building State Capacity : What Is the Impact of Development Projects?
title_fullStr	Building State Capacity : What Is the Impact of Development Projects?
title_full_unstemmed	Building State Capacity : What Is the Impact of Development Projects?
title_sort	building state capacity : what is the impact of development projects?
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/undefined/972301638988752613/Building-State-Capacity-What-Is-the-Impact-of-Development-Projects http://hdl.handle.net/10986/36694
_version_	1764485741222559744

Building State Capacity : What Is the Impact of Development Projects?

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