In some cases it may be necessary to change sidebar.php.

Find this line in the theme:

<?php wp_list_categories('show_count=1&title_li=<h2>Categories</h2>'); ?>

and replace it with this line instead:

<h2>Categories</h2>
<form action="<?php bloginfo('url'); ?>" method="get">
<?php wp_dropdown_categories('show_count=1&hierarchical=1'); ?>
<input type="submit" name="submit" value="view" />
</form>

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