This study evaluates the connectionsbetween community-driven development (CDD) and decentralizedlocal governance, and the need to identify strategies foroperational integration. It aims to deepen the understandingof how the institutional environment for local governanceinteracts with CDD project operations. It gives specialemphasis on the issue of accountability, analyzing how CDDoperations perform in terms of strengthening the capacity ofcitizens and civil society to hold local authorities andpublic service providers accountable, and the capacity ofthe local government to be held accountable. The studyutilizes a two-pronged approach. First, it assesses theinstitutional environment for accountability in localgovernance. Second, it examines the operations of two majorWorld Bank-assisted CDD projects in two municipal case studysites. Given that CDD projects both shape and are shaped bylocal governance contexts in which they are embedded, thestudy investigates how CDD operations in the Philippines areaffected by and are helping reform local governanceconditions. It is from the analysis of this interfacebetween CDD operations and local governance conditions thatthe study aims to generate policy and operationalrecommendations to enhance integration between CDD and localgovernance approaches. The analysis of the institutionalenvironment for accountability in local governance oftenfound an enabling policy and legal framework in principle,but severely limiting constraints in practice.