By treating poor people as assets and partners in the development process, studies have shown that CDD is responsive to local demands, inclusive, and more cost-effective compared to centrally-led NGO-based programmes.
For example, CBD projects can include everything from simple information sharing to social, economic and political empowerment of community groups.
As mentioned above, the third characteristic of community control of resources seems to be the key factor to conceptually distinguish between CDD and CBD projects.
However, NGOs quickly learned that well designed and implemented CDD programmes had ripple effects of promoting equity and inclusiveness, efficiency and good governance.
Good governance is promoted by greater transparency, accountability in allocation and use of resources because the community participates in project decision-making processes.
This continued investment in CDD has been driven mostly by a demand from donor agencies and developing countries for large-scale, bottom-up and demand-driven, poverty reduction subprojects that can increase the institutional capacity of small communities for self-development.
Initiated by the International Development Association (IDA) at the World Bank, CDD projects have been instrumental in harnessing the energy and capacity of communities for poverty reduction.
NFDP-II increased the productivity, living standards and development capacity of the economically active rural communities while increasing the efficiency in delivering implementation services to an estimated four million rural beneficiary households and raising the real incomes of households by 45 percent (African Development Bank, 2003).
The Social Fund for Development in Yemen provided support 7 million people of which 49 percent were female and generated 8,000 permanent jobs.
The Andhra Pradesh Rural Poverty Reduction Project (APRPRP) in India has helped to organize 10.1 million rural poor women into community-based organizations that collectively save over US$770 million and leverage credit over $2.7 billion from commercial banks (World Bank, 2003).
In this implementation elected village-level community development councils, which include women, use grants and local labor to rebuild bridges and roads, fix schools and install water pumps to benefit 13 million people across Afghanistan thereby building state credibility and strengthening local democracy.
If insurgents expect a successful aid program to weaken their position, they have an incentive to sabotage its implementation by violent means.
The program is focused on infrastructure, such as drinking water facilities, irrigation canals and roads, and services, such as training and literacy courses.
NSP is executed by the Ministry of Rural Rehabilitation and Development (MRRD) of the Government of Afghanistan, funded by the World Bank and a consortium of bilateral donors, and implemented by around25 NGOs.
The results of NSP show that the program has a significant positive effect on the sense of economic wellbeing among the villagers and their support for the central and local governments.