Social Investment Funds: An Organizational Approach to Improved Development Assistance

Abstract

This paper examines the design of social investment funds (sifs) and explores the ways they affect agents' incentives to propose, select, and implement good projects. Compared with other forms of decentralized service provision, sifs possess features of administratively delegated authority and deep political devolution. Where existing political institutions fail to deliver assistance to vulnerable groups, a well‐designed sif may represent a useful administrative alternative. This article reviews several features that provide incentives for both sif staff and project beneficiaries and concludes with practical guidelines for designing and appraising social investment funds.