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Posted November 1997

Participation in practice / 12
Costs and benefits

Introduction | People's Participation Programme (PPP)| Project preparation | Forming groups | Group activities | Implementing agencies | Financial component | Group promoters | Participatory training | Monitoring and evaluation | Project sustainability | Costs and benefits | Replicating the PPP approach | Complete Special as a single 121K file

THE COST-EFFECTIVENESS of the participatory approach is, at present, difficult to determine. This is because economic and social parameters are only partly adequate in measuring costs and benefits. The assessment of benefits is however, very important: it indicates economic and financial viability to government decision makers and planners who see development predominantly from an economic point of view.

In reviewing costs and benefits, it should be remembered that the very essence of the participatory approach is promoting the self-reliance of the rural poor. This implies low and decreasing recurrent costs, and increasing cost-recovery by the project participants. Although a participatory process needs some "start-up" external aid, the basic objective is that the process becomes self-propelling as soon as possible.

Costs of participatory projects

A typical PPP project lasts three years, with a donor contribution averaging $210,000. This contribution covers most of the total project cost. Since PPP began in 1982, each participatory project has formed, on average, 90 groups with total membership of 1,098 people. Including group members' families, total beneficiaries per project were at least 6,588 people.

Total external aid costs averaged, therefore, $63 per year per group member and less than $11 per beneficiary (i.e. the group member's dependants). While average cost per participant and beneficiary is high in the initial phase of the project, it declines rapidly as project staff are trained and as groups become more self-reliant. Average beneficiary costs in larger participatory projects would be lower due to economies of scale.

The incremental costs of including participatory elements in a larger project are low in relation to those of other technical components. Thanks to economies in administration and coordination, the incremental cost per beneficiary of including a participatory component would be lower than in smaller scale PPP projects. Incorporating participatory elements would involve the following extra costs:

The cost of adding these elements would be balanced by the improved design of the project and, in the long run, by its economic and social benefits. In some cases, extra budgetary allocations might not be needed to fund participatory elements - it may be sufficient to reallocate existing funds and staff.


A letter from the rural poor

More than 1,200 PPP group members in Sri Lanka and Zambia wrote to FAO in appreciation of the assistance they had received through the People's Participation Programme. "It is impossible to quantify all the benefits we have derived from PPP", said the letter from Sri Lanka, signed by 1,100 small farmers. "Now there is unity among the members of our groups. We work together in land preparation, cultivation of crops, weed control and repairing houses and wells. Thanks to our training programmes, joint purchase and use of inputs and access to credit, our income has increased. There is a marked decrease in alcoholism, gambling and other wasteful habits. We execute health programmes, are tackling our marketing problems and are trying to solve our land ownership problems as well. "We strongly believe that through organized action based on PPP principles, poverty and social injustice can be overcome." The Zambian groups listed similar benefits: access to fertilizer, seed, ploughs and oxen, improvements in farming methods, higher savings and better family nutrition.
Do the benefits of participation outweigh the costs? There is no easy answer to this question: the benefits of participation are difficult to assess, primarily because they take many forms, are often difficult to quantify or evaluate, and may take several years to manifest themselves.

While data are still fragmentary, there is sufficient evidence to show that PPP's benefits are significant. These benefits can be measured from two perspectives, that of individual participants and that of society in general. Benefits to participants include:

Benefits for society as a whole include:

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