Community-Driven Development and Social Capital: Evidence from Morocco

Community-driven development rests on the principle of development aid through community participation, which is expected to promote pro-social behavior. This paper studies the impact of such a program in Morocco on social capital as measured by economic field experiments. We played a public goods game to measure how much people care about others in the community, an investment game to proxy interpersonal trust, as well as a dictator game to measure altruism. Our empirical strategy exploits an administrative rule stipulating that the program be rolled out only in rural communities with a poverty rate of 30% and above. Focusing on communities close to this cut-off and using a regression discontinuity design, we find that the program increases contributions in public goods games. Conversely, the program has no impact on altruism and reduces interpersonal trust. We examine possible mechanisms underlying the observed impacts by combining the behavioral data with survey information and administrative records on project spending and selection. Overall our results suggest that a shift from a centralized to a more localized decision-making process may enhance people's sense of responsibility toward their community, but not all forms of social capital are positively affected in the process. (C) 2016 Elsevier Ltd. All rights reserved.