I think the basis of the answer is somewhere in between the comments by David Wood and Matthew Parry. David is very much against this style of project as there is no implication of "bottom-up" planning in the process of project design. This may be (and probably is) a fair assumption but we do not know this for a fact. This is an interesting topic in itself, certainly in the past planning has been 'top-down' but a full pendulum swing to bottom-up will probably lead to just as much inappropriate spending/projects/investment as has top-down. Their must be a compromise depending on the capacities of government, civil society and the people in each situation. The concept of government becoming involved to help institutions develop in areas where there is significant market failure is valid and justified and in theory the objective of the RCSP: "to stimulate private sector-led economic growth in rural areas and smaller cities of Mongolia" is a good one. In theory all projects sound great, the reality is nearly always different no matter how well intentioned designers and implementers are we can not get around the fact that project aid such as this tends to be negotiated between governments for governments. Government agendas (commercial, strategic, political) of both the donor and recipients are the most important drivers of development project assistance. Governments have to appease the lobby groups relevant to them, which tend to be both the internal and external commercial and financial institutions in exchange for votes (the government market). The added problem is the probability of government failure. Although I have no experience of Mongolia given its political and cultural history, I assume this project will be very much a government agenda project (including the direct access to rents by the bureaucracy), with a necessary although not primary goal of providing some positive assistance in these regional areas. My personal opinion of this and I would like to hear other people's thoughts (and references) is that government has a role in the development of institutions and infrastructure in developing countries because it provides benefits to the donor country. Donor country governments are not altrusitic they are driven by collective action and the production of goods and services in the government market. Government has a role in humanitarian assitance if society demands it and while individuals are altruistic (and hence should work through NGOs) society tends not to be. I agree with the "wow" of Michael? Yaffey but also believe that we have role not only because we care but also because in the longterm we will benefit. Ian Patrick University of New England Armidale, NSW 2350 Australia %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%