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This paper examines the short-term impacts of a labor-intensive public works program on household welfare and economic prospects. Using a community-level randomized control trial approach, the paper finds that the public works program targeted at youth in Sierra Leone successfully provided temporary employment to youth characterized by low educational attainment. Cash income among program participants increased by nearly three times relative to the control counterparts, and treatment households experienced a 29 percent rise in monthly income. There is also evidence of significant re-optimization of household labor allocation and expenditure in response to program participation. First, there is an overall crowding-in of labor force participation by household members beyond program participation. Second, the extra income is spent partly to improve the quality of life and partly to secure future earnings. The treated households raised spending on food, medicines, and assets. They also expanded utilization of health services. Meanwhile, the consumption of temptation goods was greater, albeit by a small amount, and the rate of absenteeism among students was higher. To secure future earnings, the treated households set up new businesses: they were nearly four times more likely than the control households to set up new household enterprises. They also boosted their participation in informal savings groups and their investments in their homes and existing businesses. These results demonstrate that public works interventions have considerable potential as productive safety nets in post-conflict settings such as Sierra Leone. They can provide immediate income support, but also open avenues for investment in the productive capacity of poor households.

The Armenian Social Investment Fund supports communities’ efforts to improve local infrastructure during Armenia’s economic transition away from central planning, financing community-designed and -implemented projects to rehabilitate primary schools, water systems, and other infrastructure. This article considers the targeting, household impact, and community effects of the social fund’s activities. It relies on a nationally representative household survey, oversampled in areas where the social fund was active. Using propensity and pipeline matching techniques to control for community self-selection into the social fund, it evaluates the household effects of rehabilitating schools and water systems. The results show that the social fund reached poor households, particularly in rural areas. Education projects increased households’ spending on education significantly and had mild effects on school attendance. Potable water projects increased household access to water and had mild positive effects on health. Communities that completed a social fund project were less likely than the comparison group to complete other local infrastructure projects, suggesting that social capital was expended in these early projects. By contrast, communities that joined the social fund later and had not yet completed their projects took more initiatives not supported by the social fund. In centrally planned economies, national governments exerted tremendous economic control. This control extended to investment in local infrastructure, including building and maintaining roads, schools, and water systems. When these economies collapsed, governments became bereft of resources. Systems for maintaining local infrastructure began to fail; as deep economic recession took hold, schools and water systems fell into disrepair. Local public services deteriorated, compounding other hardships for people living in postcommunist conditions. But because communities were accustomed to relying on central authorities to meet local needs, they often were unable to address their problems.

What happens when the state's vision and expanding reach bring it into contact with traditional value systems and governance structures? In what circumstances can the distribution of resources in a fragile society prevent-or exacerbate-conflict within and between communities? How do state expansion and public spending impact upon societal expectations of the state and state legitimacy? This report examines these questions through the lens of access, claiming, and decision making in government-sponsored community development programs. The findings illustrate the hurdles faced by government and development actors operating in pluralistic societies, and provide input on how local governance and decision making might be incorporated to enrich programming. This report aims to provide the government of Timor-Leste, particularly those responsible for decentralization, community development, and local governance planning, with information to inform their determination of an appropriate mix of models for local development. The relative priority the government will ultimately give to these different models, partly a trade-off between speed and depth, will impact on the way in which development and local governance are understood and taken on board by rural communities. This report finds that the achievement of the dual goals of state legitimacy and sustainable, effective local development hinges in large part on the willingness of state officials (and the donors that support them) to engage productively with communities and locally legitimate customary systems of authority.