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Development Funds
Advantages / Limitations:
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Funds that provide direct financing to communities and community groups contribute to:
- Empower communities by enabling them to plan activities,
design proposals, implement projects, monitor and evaluate their
success, report
- Encourage decentralisation – by channelling resources to
community groups social funds can demonstrate feasibility of and
potential for participatory planning.
- Help to restore faith in the ability of public institutions
to provide essential services and helps communities to appreciate their
own role in the process
- Set standards for transparency, accountability and quality on the governance outside the social funds.
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- Social fund approach to local participatory planning is
limited: there are usually pre-determined criteria concerning
eligibility of participants or prioritised projects, making communities
bind to a certain range of activities.
- Close scrutiny of accountability mechanism needed to prevent misuse and misdirection of resources for unintended purposes.
- Sustainability hinges on the capacity of local implementers
to identify own sources of funding and provide skilled staff and
undertake routine maintenance. Groups formed only to channel financial
support often do not outlast the sub-projects.
- Not to undermine decentralisation processes: social funds
are to be incorporated in local political decision making, but
depending on the degree of decentralisation the opportunity of social
funds to work with local governments are sometimes restricted.
- Temporary solution: Bypassing existing structures of
governance may present an important temporary solution, but can do harm
in the long run as they may displace other sources of funding, as they
may side track from tackling tough issues such as accountable and
transparent government structures.
- Framework conditions with regard to legislative settings
(taxes, budgeting, involvement of the treasury, state procurement law,
etc.) might pose restrictions.
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