When Markets Do Not Work, Should Grants Be Used?
To deal with problems of inadequate markets and the persistence of deep poverty, development agency personnel designing projects have increasingly turned to grants to provide solutions. This paper examines the theory of grants, draws lessons from...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2006/04/7009949/markets-not-work-grants-used http://hdl.handle.net/10986/9620 |
| Summary: | To deal with problems of inadequate
markets and the persistence of deep poverty, development
agency personnel designing projects have increasingly turned
to grants to provide solutions. This paper examines the
theory of grants, draws lessons from a review of their use
in twelve projects that started mostly in the years
1998-2000, discusses findings, and recommends ways to deal
with problems faced in grant projects. The paper recommends
the following: guidance notes, standard guidelines and
manuals, and training for task managers, emphasizing the
need to explicitly identify market failures and justify the
use of grants to address them, as well as providing
frameworks for detailed design of grant schemes; detailed
cost-benefit analyses of all grant-financed investments, to
the extent that such investments are of an economic nature
for which such analyses are possible; broader analyses of
other investments such as community-driven development (CDD)
projects and cash or food-for-work schemes; analysis of
pilot interventions or stylized model investments; Project
Appraisal Documents should include more details of
implementation, and give more guidance to the implementers;
and the World Bank's Independent Evaluation Group (IEG)
should evaluate grant schemes with special attention to
justification, economic evaluation, and implementation details. |
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