Supporting Communities in Transition: The Impact of the Armenia Social Investment Fund

The Armenia Social Investment Fund supports communities’ efforts to improve local infrastructure during Armenia’s economic transition away from central planning. In Armenia the social fund encourages communities to organize projects that rehabilitate primary schools and water facilities, financing approximately 90 percent of initiatives that communities design and implement. This study considers the targeting, household impact and community effects of Armenia’s social fund activities. It relies upon a nationally representative household survey, over-sampled in areas where the social fund was active. Using propensity and pipeline match techniques to control for community selfselection into the social fund, it evaluates household impacts of rehabilitating schools and health posts. The social fund reached poor households, particularly in rural areas. Compared with control groups, education projects increased households' education expenditures to a significant degree and had mild effects on school attendance. Potable water projects improved household access to water and improved health. Those communities that completed a social fund project were less likely than the control group to complete other local infrastructure projects, suggesting social capital was expended in these early projects. By contrast, communities that joined ASIF later and had not yet completed their projects took more initiatives not supported by the social fund.