SE Asia Speaker Series: Larry Chavis

Indonesia’s Kecamantan Development Project:  Insights into Community Driven Development

This talk will summarize my work on the effect of competition between villages in Indonesia for block grants aimed at infrastructure and microcredit.  This was work I carried out about 10 years ago.  I will also take some time to reflect on how this large-scale, multi-billion dollar project has evolved over time given the initial focus on competition.  Below is the abstract from my initial research project.

Decentralizing the allocation of public goods by giving funds directly to communities takes advantage of local information concerning needs, but leaves funds open to misuse or capture by local elites.  In Indonesia, the World Bank attempts to overcome this downside of decentralized allocation by having communities compete locally for block grants.  Competition weeds out less efficient projects.  Increasing the number of villages bidding by 10% leads to a 1.8% decline in road construction costs.  A similar pattern is found among microcredit projects.  Increased community participation in project planning and in the allocation of funding also leads to better outcomes.

Larry Chavis researches how weak institutions in developing countries pose challenges for new business formation. He received his PhD in economics from the Stanford Graduate School of Business, an MS in applied economics and management and an MA in Asian studies from Cornell University, and a BA in anthropology from Duke University.