There remains an important role for projects – but the role is not to deliver finance to favored sectors. Rather, the important role of projects is to support knowledge creation. Often what stands in the way of effective public services is not a lack of money, but rather ineffective policies and institutions at the sector and local level. Countries and communities need to learn what will work in service provision.
A concrete example comes from the rural water sector. When donors do not promote beneficiary participation the success rate of projects is only 10 percent. When donors encourage the involvement of beneficiaries in design and implementation, success rate is far higher. This is a good example of how donors can help communities create the knowledge that they need for effective service provision.
