Constituency Development Fund (CDF) schemes are decentralisation initiatives which send funds from the central government to each constituency for expenditure on development projects intended to address particular local needs. A key feature of CDF schemes is that Members of Parliament (MP) typically exert a tremendous degree of control over how funds are spent. The practice was first adopted in India, but gained prominence when Kenya established a CDF in 2003. Based on the perceived success of the Kenya model and various political and historical drivers, the trend has spread to other African countries and across the world in recent years. The following countries have adopted some form of a Constituency Development Fund:

The major argument in favour of CDFs is that they skirt bureaucratic hassles which weaken the efficiency and effectiveness of the usual government development programmes. Theoretically, by sending funds directly to constituency level and enabling communities to identify their own local development priorities, funds are spent faster, and spent on the right things. Those supporting CDFs believe it is a vital and innovative means to achieve tangible development outcomes at a grassroots level.

However from the citizen perspective, there are three main concerns with these arguments. In the view of most civil society groups concerned with accountability and governance issues, the first and foremost issue is that CDF schemes violate the separation of powers principle on which democratic constitutional governments are built. CDFs put MPs in the position of implementing government programmes, instead of focusing on their legislative and oversight functions. In the most glaring example, Parliament approves the establishment of the CDF and funds are then transferred directly to the bank accounts of MPs, who are responsible for choosing projects and approving expenditure. The body responsible for managing the funds - typically the national Ministry - reports back to Parliament, whose members are the implementers and, often beneficiaries, of the fund. Without adequate checks and balances built into this system to ensure independent oversight, the opportunity is wide open for corruption, fraud, wastage and use of funds for personal or political gain by MPs.

Second, a key argument in favour of CDFs - that they enable communities themselves to choose how funds are spent - is eroded if in reality the public are not aware of or involved in CDF processes. Experience in countries has shown that excessive powers of the MP are often accompanied by very poor public participation in project prioritisation and inadequate access to information, which undermines communities’ ability to hold authorities accountable for how funds are used. Unless legislation and institutions are designed to curb MP’s influence and protect genuine public participation, then the benefits of delivering funds directly to the grassroots to be prioritised by the community will not be realized.

Even if a legislative framework is put in place to limit MP participation, ensure adequate checks and balances, and enable genuine participation, there is a third issue which relates to the relevance and need for the programme. The push towards decentralization for development in some African countries has resulted in a number of decentralization schemes being introduced in recent years. The result is a layering and duplicity of programmes as multiple schemes are set up to send funds to local level. Often these initiatives have not reaped the anticipated development benefits due to problems with bureaucracy, sufficiency of funding, and capacity. The concern is that the introduction of the CDF represents another potentially problematic decentralization scheme which will further compound the administrative burden of local authorities and result in the same problems encountered by current initiatives. Government would do better to focus on improving the efficiency, effectiveness and quantum of funding under existing decentralization schemes.

Apart from the more theoretical debate around the constitutionality and relevance of CDFs, practical issues have arisen around implementation. There is little comparative data on design and practical impacts of these programmes despite a proliferation of CDF schemes on multiple continents. Such information is needed by civil society groups who wish to substantively engage debates in their own country around the possible establishment, proposed expansion, or suggested reforms of CDFs.

The purpose of this scoping paper is therefore to:

• Provide an overview of CDFs: when, where and how they have emerged worldwide;
• Identify the key features of CDFs which impact on their performance;
• Outline the arguments and evidence available for and against CDFs, and;
• Investigate the opportunities and possible future research from an advocacy perspective.