Decentralization and project success: Analysis of agricultural development projects in sub-Saharan Africa

This research investigates the relationship between organization structure and institutional effectiveness. It tests the impact of the level of decentralization of the organization, or the relative proximity of an organizational sub-unit to the nexus of overall decision-making, on the rate of return achieved by development projects. The context of this research is agricultural development in Sub-Saharan Africa and the unit of analysis is the development project, specifically 156 World Bank projects. This dissertation assesses the impact of the level of decentralization of project management on the success of World Bank agricultural projects. The hypothesis is that the level of decentralization has an affect on the success of the project and that projects with more decentralized project management will be more successful in achieving their development goals. The method for assessment is a statistically-based analysis, including multivariate regression analysis. The key causal focus, the level of decentralization, is specified by using a typology consisting of the five major forms of decentralization found in developing country governments. The success of the project is measured by the rate of return on project investment. Other variables, representing other important explanatory factors, are used as control variables. Confirming the research hypothesis, it was found that projects with more decentralized management structures (devolved, delegated, and privatized management) are more successful than projects with more centralized management structures (centrally-managed and deconcentrated management). Centrally-managed projects had an average rate of return six percentage points lower than projects with decentralized management. This dissertation lends credence to general organization theories that assert a relationship between organization structure and effectiveness as well as specific propositions from development literature that favor decentralized management. The dissertation also calls into question the use of centralized management in African countries which have decentralized traditions.