Institution building in challenging contexts – energy for development in Tanzania

Magazine article, 2017

The Sustainable Development Goal 7 includes achieving universal electricity access, which will require the deployment of renewable energy sources for small-scale and decentralized electricity provision. However, rural electrification (RE) projects – as well as development projects more gen-erally – often fail to maintain service delivery over time. In this paper, we approach the overarching question of challenges to development projects in contexts characterized by poverty, low trust and corruption. Previous work clearly demonstrates that development projects in general, and not least decentralized electrification projects, tend to face significant obstacles, and even fail, in such con-texts. However, there is a knowledge gap regarding the mechanisms through which a “difficult” institutional context challenges institution building within development projects. More importantly, knowledge is also lacking regarding viable strategies for institution building in these contexts. In this paper, we study the process whereby an international non-governmental organization (NGO) implements a rural electrification project and establishes a small-scale hydropower station and a local utility to own and operate it. Through analyzing a development project with a relatively suc-cessful institution building process, this paper makes a contribution to the literature on institution building in challenging contexts. We investigate first how trust in an organization can be built in a context characterized by low levels of generalized trust, high levels of corruption and poor institu-tions, to the extent that people are prepared to invest in these organizations for long-term gain. Second, we study how free-riding problems can be handled in a local development project in a way that is both effective and legitimate. The analysis is based on an extensive empirical material from a qualitative case study, including 119 semi-structured interviews with project staff, villagers, and local and district government. Our study points to the importance of (a) a positive history of play and efforts to build trust that are sustained over a substantial period of time, (b) keeping distance from existing political institutions, (c) strict enforcement of the rules of the institution, and (d) strict impartiality in enforcement.