Does participation improve project performance: establishing causality with subjective data

Abstract

Development practitioners are coming to a consensus that participation by the intended beneficiaries improves project performance. But is there convincing evidence that this is true? Skeptics have three objections: 1)Participation is not objective -- project rankings are subjective; 2) this subjectivity leads tohalo effects; 3) better project performance may have increased beneficiary participation rather than the other way around -- a statistical association is not proof of cause and effect. The authors show methodologically how to answer each of these objections. Subjectivity does not preclude reliable cardinal measurement. Halo effects do not appear to induce a strong upward bias in estimating the effect of participation. Finally, instrumental variables estimation can help establish a structural cause and effect relationship between participation and project performance -- at least in the rural water supply projects they studied.