The Economist cites a World Bank report warning that giving aid to local decision-makers is less useful than had been hoped:
Channelling development aid directly to local decision-makers sounds like a good plan. Empowering local groups like community clubs and school boards means decisions can reflect actual needs on the ground. It should mean fewer bureaucratic hands in the pot, too. But a new report by two World Bank economists warns against relying on decisions made at the most local level of government. Entrenched elites, bribery and fraud are as much of a problem in village life as they are in big emerging-market bureaucracies.
Also this:
The first problem is corruption. A study based in Madagascar, for example, found that central government was actually a relatively safe steward of development cash, with more of it siphoned off at local-government levels.
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