Participatory Development in the Presence of Endogenous Community Imperfections.

Community imperfections in terms of insurance provision, rule enforcement, and enforcement of property rights in land tend to increase as economic opportunities and aspirations are enlarged, land becomes more scarce, and people's values change, especially among the educated youth. Hence the critical importance of institutional support to rural communities in any approach to decentralized development. A serious problem nevertheless arises from the fact that institutional support is costly in resources that are extremely scarce and is bound to take a lot of time. It is therefore tempting for big donor agencies to bypass that process by channeling resources through local leaders or dubious intermediaries, which immediately creates the risk that these resources are 'hijacked' by unaccountable elites.