Posted February 1998
| Food and Agriculture Organization of the United Nations | United Nations Capital Development Fund | International Fund for Agricultural Development | German Agency for Technical Cooperation | Swiss Agency for Development and Cooperation | World Bank |
Rome
16-18 December 1997
Technical Consultation on Decentralization
Documentation
ALLOW ME to attempt to present some of the basic concepts contained in "The reconstruction of rural institutions", the paper prepared for this Technical Consultation on Decentralisation by Gustavo Gordillo. Mr Gordillo was Director, Rural Development Division until a few day ago, when he became Assistant Director General, Regional Representative for Latin America and the Caribbean.
In a recent publication, Serge Boisier of UNDP has indicated that while it is true that we do not have a recipe book for conducting development activities, we do have two important certainties. First, that if development is to be achieved, it will not be through ideas belonging to the past. Second, that if development is to be the result of community initiatives and wishes, it will not be outside agents but the communities themselves to implement them. This statement is relevant when considering institutional issues. "The reconstruction of rural institutions", the title of the this paper, refers to the overall conditions under which Latin American rural communities and peasant organizations are presently trying to reconstruct their capacities so as to become full participants in the process of building a new style of development, a new and more productive, equitable and sustainable society.
Mr Gordillo summarizes the features of agriculture in the Region at the end of the eighties, and underlines the new trends that have been explored during recent years: a broader view of the role of agriculture; a noticeable change in strategies, and a new conception of the interaction between markets, state and civil society.
A first stage of the reforms implemented is mentioned, characterized by deregulation; streamlining of bureaucracies and privatization of state enterprises. In spite of some important progress, governments are still in the middle of the road. There is also a lack of institutional answers to the demand and needs of less endowed producers.
Mr Gordillo considers that there is a growing consensus about the desirable features of a second stage of reforms, focused on institutional reconstruction. These features include an even greater elimination of paternalistic and authoritarian practices; effective state support of the agricultural adjustment process that, by respecting producers' autonomy, is able to induce economic reconstruction and productive reconversion processes, accompanied by alternatives to economic development and social cohesion of the rural communities; and an innovative scheme of incentives and regulations that fosters synergetic linkages between market dynamics, state promotion and producers' strategies.
These desirable features assume that the reconstruction of the rural institutional framework is not limited to changes in the organizational structures and functions of state institutions, but also addresses the set of rules and conventions, acceptable and agreeable to the producers, and even ethical and moral norms of behaviour which are part of the structural framework of social interaction.
Within this broader approach, the main role of institutional development should be to increase efficiencies and reduce uncertainties through the design of a stable structure that favours economic and social interaction. This paper states that in this respect, it is needed:
The purpose is to establish a path of transformation that would reflect consensus, direction and the stability of agricultural policies in order to generate certainty and contain authoritarian and discretionary risks.
Gustavo Gordillo thinks that however, a transition period unfolded by the reforms can also result in an institutional crisis in the rural sector in which four factors may arise: a) an institutional vacuum generated by the absence of a new institutional framework; b) an imbalance between the intention and the capacity for renovation of rural institutions; c) resistance that can hinder or distort the institutional change; d) the absence of synchronism between the structural and institutional development of the rural sector and the changes in the rest of the economy and society; and e) a tendency towards a selective modernization only in some sectors or regions based on simplistic economic criteria that envisage these as the only "viable" sectors.
In addition, the Latin American countryside faces four main challenges that can be sketched out by the following questions:
Likewise, it would be necessary to build social consensus on the objectives, terms and costs of the main policies of rural promotion, especially with regard to supports, and translate these agreements into legal schemes that would guarantee the fulfilment of commitments and the stability of policies and rules. The latter is a precondition to the achievement of any other objective and to the generation of certainty among the economic agents in the countryside.
Another essential aspect of this promotion plan is decentralization, the redistribution of state power into geographical areas, which - in a general democratic context - means the devolution of power in a co-responsible way both to municipalities and to producers' organizations. Also, this aspect is essential for the successful management of differentiated interventions.
Once the reform processes have begun, governments should address the challenges for consolidating structural reforms by creating legitimate political coalitions to support those reforms. The best way to do this is by a profound democratic reform. Since the legitimacy of a democratic state does not only depend on its economic performance, and since it concedes a significant diffusion of power and responsibility, democratic regimes are more stable and resistant during economic and even political crises.
However, democratic performance depends on the political institutions that channel conflicts arising out of economic reforms. The experience from developed countries shows that there are a broad range of political institutions compatible with a market economy and a representative government, but the transition towards those institutional arrangements is difficult and reversible.
On the other hand, economic equity facilitates democratization and slows down the negative impacts of economic reforms. When citizens believe that the costs associated with the reform are fairly distributed, the reform can be more successful and the democratic regimes have greater possibilities to survive. When democracies protect the less advantaged groups from intolerable suffering, they show that solidarity is a basic component of their legitimacy.
Finally, one of the great surprises of the last years has been the coexistence, apparent compatibility and even complementarity of democratization processes with economic reforms, but there is no adequate theoretical interpretation to explain this fact. We need to know more about the distributive implications of the economic reform, and how traditional vested interests have been organized and reorganized in response to the economic reform. Until we know the mechanisms by which political and economic reforms can be mutually reinforced, we will not be able to create policies designed to effectively support either one.
Institutional reform in the rural sector requires first a simple social legitimacy in transforming the institutions, but its translation into a legal reform needs a political convergence that recognize the ability of the reform to consolidate the social base for transformation. The efficiency factor in institutional transformation cannot be separated from the distributive factors involved in all types of institutional reforms. It involves power shifts and political processes. This would mean that, in the case of an agricultural sector with a high degree of social polarization, for real modernization to take place it should be highly inclusive. Thus, the cornerstone of an effective rural development strategy consists of incorporating all social actors, i.e. small producers, family farms, indigenous populations, women, commercial farmers, investors and others, in the new institutional rules.
Today, the debate around reforms and alternatives to authoritarian models, centralism and corporativism in the management of agricultural policies is on the top of the agenda.
The solution to authoritarian regimes can become the touchstone to resolve the complex crisis of the agricultural sector. In a few words, Mr Gordillo considers that authoritarianism is a central obstacle to the revitalization of the countryside. It is important to remember that in the rural sector there have been changes in the traditional processes of elaborating and implementing public policies. Changes that are the result of the partial breakdown of the corporatistic structure, of privatization and deregulation processes, of the counterweight that introduces greater political and economic freedom for producers, and of the incipient capacity of social control.
However, the effects of these changes are blocked by the continuous presence of an authoritarian culture and the lack of initiative by producers' representatives to advance toward a type of genuine, joint and co-responsible management of rural programmes and policies.
Another way is found in decentralization and social participation, which are closely linked with the issue of governability and inclusion in the modernization project. It is in the rural environment that most demands and possibilities exist to carry out these two issues and to find answers to the economic stagnation in the countryside as well as the frail social stability of many regions.
There are also pending matters such as the absence of a concrete debate around the frontiers between the rural public and private sector to establish which demands and issues are of public interest and belong to the federal, regional or local agenda, and which issues need to be dealt with within the boundaries of the interactions between economic agents under the legal framework and the legal administrative apparatus. These definitions would also limit the influence of authoritarianism.
The above issues indicate the importance of creating and agreeing on a solid form of decentralization in rural development. A course of development that, in accordance with the new agricultural paradigm and under the assumption of increasing democratization in the agricultural sector, proposes the creation of local conditions for an effective social participation, where the final destiny of public resources allocated to the region and the implementation of policies are decided.
The creation of these local conditions is not enough. It is crucial to reorder the central institutional arrangement that guarantees a strategic national vision in the development of the agricultural sector and that has the real capacity to define, unite and manage the principal rural policies and programmes. This aspect is the key to put an end to the institutional dispersion which has traditionally decided and managed agricultural policies.
The above issues outline the premises for an effective revalorization of the regional context in the design process and the management of rural policies.
This paper is specifically geared to recent experiences in Latin America. I trust that during our discussions participants will wish to contribute other experiences and ideas on the theme of rural decentralisation which will enrich our knowledge and consultation.
I would be very pleased if you can consider that this presentation has been enough to communicate some of the main findings of Gustavo Gordillo's " The reconstruction of rural institutions". I hope that during the following discussions and exchanges it would be possible for the distinguished participants to extract more intelligent conclusions than me from this paper, so provocative and pertinent as regards our subject. If so, it could be the best way to recognise the efforts and the insightful commitment of Gustavo Gordillo in the design and organization of this Technical Consultation.
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