Abstract: | Since the 1970s many non‐governmental development organisations have moved away from top‐down modes of operation toward participatory practices that hand over decision‐making power to the poor. The bilateral development agencies of the industrialised states have been slower to follow suit, but in the 1980s and 1990s a number of such agencies also initiated participatory‐oriented reforms. Development scholars have paid little attention to reforms of the larger organisations. In this article, we analyse the efforts of the United States Agency for International Development to embrace participation in the 1990s. Internal reformers managed to change some agency procedures but had only limited success in institutionalising participatory practices. Forces internal to the agency, including rigid rules and employee incentive structures, hampered reform efforts. Also, while some developments external to the agency facilitated participation, many others, including legislative interference and shifting national policy priorities, hindered change toward participation. The case reveals how complex webs of accountability relationships make participatory‐oriented transformation a cumbersome process in large development organisations. Change towards participation can succeed, but only if reformers acknowledge and consider existing institutional constraints. Copyright © 2004 John Wiley & Sons, Ltd. |