Powering institutions for development-Organizational strategies for decentralized electricity provision

The study addresses the question of how to achieve and sustain well-functioning local service delivery in institutionally difficult contexts, characterised by low levels of generalised trust, widespread corruption and poor institutions. We study a relatively successful case of decentralized electrification in Tanzania, and the process whereby an international NGO establishes a small-scale hydropower system with a local utility to own and operate it. Building on institutional theory, we investigate how to build trust in an organization, through a strategy of credible commitment; and how free-riding problems can be handled in a local development project. The qualitative study includes 119 semistructured interviews with project staff, villagers, and local and district government, observations and document analysis. The results indicate the importance of a positive 'history of play', sustained over time, and keeping distance from corrupt institutions, in order to build trust. Strict enforcement of rules was decisive for handling free riding behaviours, and impartiality in enforcement for perceptions of legitimacy and trustworthiness. Deviations undermined relations of trust. The results add nuance to more generic theoretical propositions and provide insights on un/intended consequences of institutional strategies. These are relevant for creating and sustaining local service organizations for electricity access and other public goods.