Dissertation (MA Development Studies)This study entitled “The Contribution of Local Government Capital Development Grants in Improving Community Livelihoods” was conducted in Meru District, Arusha, Tanzania in four selected villages namely King’ori, Kikatiti, Maji ya Chai and Patandi. Data were collected using questionnaire survey and interviews. The total number of 89 respondents was from these villages, King’ori (22) respondents, Kikatiti (24) respondents, Maji ya chai (24) respondents and Patandi (25) respondents. The study involved 7 key informants. Qualitative data were analysed using the Statistical Package for Social Sciences (SPSS) software version 20. Finding from the study revealed that about 80.7 % of respondents are aware of the contribution of LGCDG for improving local community’s livelihoods. It was further found that LGCDG have contributed to the improvements of local communities, livelihoods, these services are education, health, water supply, agriculture, roads maintenance, administration and environmental management. The study also found that there were priorities in delivery of these services to the local communities these are; education, health and water supply while other services such as agriculture, rural roads maintenance, administration and environmental conservation was minimal. Also, respondents’ views on funds allocations for social service delivery on time posits that the local government has failed to provide services effectively because of delaying of funds from donors and central governments to the districts, insufficient cooperation with local people in service provision, few capital allocations in social service provision. Therefore, to make local government effective through service provision, donors and central government should disburse funds on time, increase portion of these grants.