Community-Driven Development (CDD) approaches have become an important part of development operations. Using data from 1,200 households in 66 communities participating in a CDD project in the Philippines, we analyze how communities select their proposals and how resources are allocated across villages. Resources flow to the poorest and more politically active villages. Controlling for poverty, more unequal villages are more likely to receive funding. This surprising result is because in more unequal villages, the elected village leader is more likely to override community preferences, and to influence inter-village competition such that project resources flow to their villages. © 2008 The World Bank.
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