There is little evidence on the extent to which local level initiatives contribute to household welfare. Even though studies on social capital have been conducted elsewhere in Asia and Latin America, they are of no use to Rwanda. Under population pressure and land scarcity context, local level institutions might play a predominant role in poverty reduction efforts. This paper seeks to answer the following questions: Are local level institutions really the best vehicle for reducing rural poverty and enhancing growth in Rwanda? What are the main constraints to Community Driven Development in Rwanda? Our analysis is based on household survey with 240 respondents randomly selected across one rural and densely populated district. The study finds a substantial number of local institutions in the area and a substantial degree of interaction of the households with these institutions. These include largely informal savings groups in form of “tontines,” community associations, faith based organizations, and other self-help organizations. Econometric results suggest that such institutions do not affect poverty alleviation in the area. Institutions are constrained by lack of financial assets, limited access to credit, low level of members’ education, and other organizational problems. In order to bring local level institutions’ activity to fruition, the above-mentioned constraints need to be addressed. Therefore, the Rwandan Government agenda should not ignore technical support to local institutions through, for example, a continuous capacity building at sector level, the creation of a conducive environment by providing information and communication technology facilities, and building suitable rural infrastructure.
|Keywords:||Local Institution, Poverty Alleviation, Rwanda|
Ph.D Fellow, Junior Researcher, Department of Economics and Technological Change, Center for Development Research, Bonn, Germany