The purpose of the study on which this report is based was to identify lessons from implementation of the Neighborhood Upgrading Shelter Sector Project (NUSSP) that would allow the success of this community-driven urban development initiative in Indonesia to be replicated elsewhere. In general, the study examined the extent to which the project contributed to improvements in service delivery and governance in the beneficiary communities. More specifically, the study's objectives were to assess (1) the quality and sustainability of infrastructure services delivered, (2) the extent to which subproject investment decisions corresponded to beneficiary needs and expressed demand, (3) the extent to which study-area residents were able to influence the behavior of their leaders and exact accountability from them, and (4) whether or not participation in community-driven development (CDD) subprojects influenced the nature of institutional arrangements for local service delivery lying outside the scope of the project.

The study adopted a qualitative approach to performing these assessments in that the primary information-gathering vehicle was a household survey supported by focus group discussions, survey interviews, in-depth interviews, and direct consultant observation. The research for the study was conducted in six communities in all, three of these in Lamongan District in East Java Province, and three in the municipality of Yogyakarta in Yogyakarta Province.

In general, the study found that despite problems in targeting beneficiaries, the NUSSP subprojects included in the research sample were well implemented, a common feature of these programs being development of small-scale infrastructure in slum neighborhoods. The quality of subproject outputs was likewise excellent. Similarly, project planning and implementation were also judged to be transparent and accountable. The level of community participation in planning, implementation, and monitoring of the subprojects surveyed—particularly those implemented by the beneficiaries themselves—was also judged to be high. That said, participation by women and poor villagers was judged to be relatively low. Finally, the impact of the subprojects surveyed on the quality of institutional arrangements for local service delivery lying outside the scope of the project was not significant.