TY - JOUR
T1 - Elite capture through information distortion
T2 - A theoretical essay
AU - Platteau, Jean-Philippe
AU - Somville, Vincent
AU - Wahhaj, Zaki
PY - 2014/1/1
Y1 - 2014/1/1
N2 - We investigate donor-beneficiary relationships in participatory development programmes, where (i) communities are heterogeneous and dominated by the local elite, (ii) the elite strategically proposes a project to the donor, knowing that the latter has imperfect knowledge of the needs of the target population. We analyse how changes in the donor's outside option or information about the needs of the target population affect elite capture. Our central, paradoxical result is that a more attractive outside option, or a higher quality of donor's information may end up encouraging the local elite to propose a project that better matches their own preference rather than the preference of the grassroots. Moreover, in the case where the noise in the donor's information follows a normal distribution, we find that a better outside option generally decreases elite capture but improved information about the needs of the target population is likely to increase elite capture.
AB - We investigate donor-beneficiary relationships in participatory development programmes, where (i) communities are heterogeneous and dominated by the local elite, (ii) the elite strategically proposes a project to the donor, knowing that the latter has imperfect knowledge of the needs of the target population. We analyse how changes in the donor's outside option or information about the needs of the target population affect elite capture. Our central, paradoxical result is that a more attractive outside option, or a higher quality of donor's information may end up encouraging the local elite to propose a project that better matches their own preference rather than the preference of the grassroots. Moreover, in the case where the noise in the donor's information follows a normal distribution, we find that a better outside option generally decreases elite capture but improved information about the needs of the target population is likely to increase elite capture.
KW - Aid effectiveness
KW - Community-driven development
KW - Elite capture
KW - Information distortion
KW - Preference targeting
UR - http://www.scopus.com/inward/record.url?scp=84887136114&partnerID=8YFLogxK
U2 - 10.1016/j.jdeveco.2013.10.002
DO - 10.1016/j.jdeveco.2013.10.002
M3 - Article
AN - SCOPUS:84887136114
SN - 0304-3878
VL - 106
SP - 250
EP - 263
JO - Journal of Development Economics
JF - Journal of Development Economics
ER -