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Round table 2 - Managing institutions

Day 1

What are the implications of decentralization for the rural sector?


The group discussed two decentralization approaches.

The delivery model - In this model the state is the main agent for delivering goods and services to the rural sector. The decentralization process entails the transfer of delivery functions to other agents, such as NGOs, community groups or private sector.

The combined-empowerment model - This model concentrates on the transfer of political and economic decision-making power from centralized entities to intermediate and grassroots level structures. Sustainable decentralization requires not only the transfer of policy-making functions and capabilities, but also the provision of resources that enable new local leaders to operationalize their decisions.

A successful decentralization process requires:

· training

· organization

· technical assistance

· information

· technology transfer

· information networks beyond

· funding

local and regional borders

· infrastructure

· political mandate of local leaders

Concept of combined empowerment

The participants found that decentralization is often limited to the political realm, i.e. the newly-established authorities at the local level tend to lack the economic resources and institutional means necessary to carry out their commitments to their constituency. This concept can be clarified by three potential scenarios

Scenario 1. in which both the political and economic empowerment of local authorities occurs simultaneously, represents the ideal decentralization path.

Scenario 3. in which only political power is transferred, represents the worst but also the most commonly experienced situation.

However, in Scenario 2. the vacuum of resources and services left by the central government is sometimes, but often insufficiently, filled by international NGOs that try to push the decentralization path from Scenario 3 to Scenario 1. Only the combined effort with other agents, such as central and regional governments, national NGOs, the private sector, including self-help groups and cooperatives, will ensure that Scenario 1 is reached. If the vacuum is filled by international NGOs then only the level of Scenario 2 can be reached.

Additional issues that can make the decentralization process smoother and ensure its success.

· Avoid top-down process.

· Validate local initiatives and knowledge to ensure ethical and political mandate.

· Adjust the speed of empowerment to the level of conditions met at local level.

· Emphasize accountability during the process of economic empowerment.

· Ensure that NGOs (international and national), central and local governments, private sector and local initiatives work together through an organized network.

Finally, decentralization should be and/or result from the evolution/transformation of government structures according to their own dynamic. It should not be a result of external pressures/conditions imposed by international money lending institutions.

Day 2

How to ensure grassroots participation in rural development decision-making ?


Discussions were based on three observations.

· There is a strong demand for/reawakening of grassroots participation in the process of democratization that is taking place in the world and causing the transition toward the market economies (e.g. Eastern Europe).

· The underlying objective is to design rural development strategies that consider rural populations' concerns, together with their initiatives, knowledge and practices. This we refer to as the "process of sustainable grassroots participation."

· Interventionist tradition and excessive government interference have stifled the participatory process causing differences in points of departure for the various population groups.

Three conditions need to be met if participation is not to benefit solely the more articulate sectors of the population and if it is not to be confined to a strictly local setting.

a. Populations must be made aware of the advantages of participation on the basis of their own realities and their own questions, for example, mobilizing actions around problems that cannot be resolved at individual or sectorial level.

b. Information flows need to be networked to permit dynamic interaction between local experiences and the various players.

c. A reliable institutional framework needs to be established so participants have legal recourse to settle differences and intermediary associations should enable local initiatives to be echoed and reciprocated at national level, through linkages between rural populations and the national level.

For these same reasons, the nature of the intervention should be adjusted to individual circumstances, as laid out in the table below.



1. Motivated, dynamic and independent local communities

1. Information and guarantees regarding conditions of access to markets

2. Organized, coordinated communities with difficulties of communication with the national system

2. To help them mobilize better and acquire appropriate negotiating strength.

3. Communities aware of their needs but too uncoordinated and disorganized to formulate demands coherently

3. To support their organizational and coordination efforts.

4. Communities that have internalized their problems and oppression and are therefore incapable of formulating the slightest demand.

4. To help them mobilize and organize themselves.

This raises the issue of the role of the state, NGOs, international funding agencies, the private sector and producers' associations in the rural development process.

Day 3

What is the role of the different actors in rural development?


The main actors of rural development are the international organizations (IOs), the state, the NGOs, the rural private sector (RPS) and the intermediary associations or producers' organizations (POs).

The group set out to determine what should be expected from each actor and what should be avoided in a sustainable rural development strategy based on participation and local resources and know-how.


IOs can contribute a global perspective to rural development through past experiences, transfer of know-how and technology, networks and methods of intervention and financial support. They should avoid imposing options in return for financial assistance. Priority should be given to supporting national objectives that will facilitate integration at international level.

One question for discussion is whether IOs should deal only with governments or work directly with the other actors without going through the state.


The state should focus its instruments of intervention (fiscal policy) on supporting the least privileged actors and agents with production potential. This requires a decentralization policy and the redeployment of government towards the regions. Its intervention should have a strong regional emphasis.

State priorities for rural development should include education, training, consideration of local skills, people's participation in defining policies tailored to type of producer and level of organizational maturity, and guaranteed juridical stability for ownership rights, particularly over land.

The state should provide mechanisms to mediate disputes, reconcile national policies with local constraints and pursue objectives that the market alone cannot achieve.


NGOs can serve as useful facilitators of dialogue between national and international actors on the one hand, and policy beneficiaries on the other.

They should respect the frameworks and regulations defined by the state and the needs expressed by the beneficiaries. In certain cases they can help beneficiaries express these needs clearly. However, they must always avoid the double risk of not taking these needs into account and of supplanting local institutions.

Their proximity to and knowledge of local conditions are an asset for the other development actors if there is sufficient coordination to implement a coherent and socially-validated strategy.

Besides abiding by code of practice and greater transparency, NGOs should also design their programmes and projects in such a way that they can gradually withdraw to let the beneficiaries take over.


The RPS has developed entrepreneurial skills which can be placed at the disposal of the producers' organizations for the building of partnerships (financial, trade, industrial, technological).

Such partnerships can combine the technical innovations of the RPS with the social and organizational innovations of the producers' organizations.

This would attract foreign investment, provide information on market trends and permit the transfer of technology to improve the quality of agricultural products.

It should be recognized that partnership can only be based on the identification of profitable projects. In other words, rural development should be approached from an economic rather than social or welfare perspective.


POs should enable policy beneficiaries to oversee the production and marketing situation as a whole, building links between agriculture and the processing industry and making strategic information available on developments and foreseeable trends in the production and marketing chain.

The monitoring brief should also include the capacity to make proposals and thus become the main actors of rural development as well as the capacity to negotiate their projects with the other actors to become part of a global development strategy.

As part of the decentralization and participatory process, POs can give individual producers an overall perspective of the environment in which they work so that they can build closer links with the other markets.

POs should negotiate an institutional framework with the state that recognizes the role of intermediary association in rural development.


Towards a Global Strategy for Rural Development


The group felt that a global strategy for rural development during the post-cold war era should (a) ensure participation of target populations and (b) lead to sustainable outcomes.

After reflecting on the deliberations of the three days, the group concluded that the two key elements described above can best be addressed through strategies that emphasize local competencies and knowledge (starting with what people know and have, rather than what they lack) and help foster local initiatives.


It was realized that such strategies could be implemented through (a) the delivery system route and (b) the entrepreneurial route.

In the past, most governments and developmental agencies relied on the delivery system route. While strategies implemented through this route may have provided relief to deprived sections of society in some places, the overall, long-term impact seems to have been marginal or even negative in some cases.

Excessive dependence on the state and external agencies has led to the stifling of local initiative. Often the delivery system has failed to deliver the goods on account of faulty design. Failures at the implementation level were mainly due to (a) leakages in the delivery channels and/or (b) inefficiencies, leading to high cost both for the state and the targeted beneficiaries. In most of the state-initiated schemes, participation was typically low since the people did not have a say in the design or the monitoring of such schemes.


In the post-cold war era, different nations find themselves at different stages of agrarian reform and decentralization which provides the context in which participation should be sought.

Although 'decentralization' has several connotations, the two most commonly understood are (a) devolution of power (decision-making) to lower levels and ultimately to the level of the people themselves and (b) folding up of services from the delivery system.

Strategies should take into account the existing state as well as trends in agrarian reform and decentralization. They should also be sensitive to socio-ecological differences among countries/regions/nations.


a. Intermediate and state agencies should recognize that rural populations are not homogeneous. Rural populations could consist of the

· poor and not-so-poor,
· producers and non-producers,
· organized and unorganized,
· articulate and inarticulate,
· self-propelled and dependent, etc.

External agencies should take these differences into account while developing rural development strategies. For instance, the strategies for people in a state of 'learned helplessness' should be totally different from strategies for those who are self-propelled and self-motivated.

b. Decentralization is both political and economic and can be seen not only as the context but also as a pre-condition for improving participation. The experience in several countries has shown that when economic decentralization has not accompanied or followed political decentralization, the results have been counterproductive, resulting in further alienation that tests the social fabric of society.

c. Among the better known conditions for participation is the improvement of access to resources. Agrarian reforms play an important role in improving the access of the poor to the means of production.

d. People often fail to participate because of their inability to overcome the risks involved in a new enterprise/project/programme. Sometimes the risks may be about future returns from current investments or from uncertainty about the behaviour of other members of the community/peer groups. In the case of the oppressed, the risk may stem from potential threats from vested interests. Assurances from intermediate/state agencies may help such people overcome such risks.

e. Although it is wrong to assume that resource poor farmers/producers lack the knowledge and capacity to solve their problems in a creative manner, sometimes new projects entail the need to acquire new skills, information, knowledge or technology. Access to these is a necessary condition for participation and also for the success of the projects.

f. Projects/programmes are known to fail because of the failure of designers to take into account their compatibility with the value system and culture of the target population. This could be avoided by ensuring that potential beneficiaries are involved in the design of the project/programme.

g. Decentralization usually leaves an institutional vacuum in its wake. New and appropriate intermediary institutions are needed to fill this vacuum and to ensure that the above-stated conditions are met.


People and intermediary institutions are not the only actors involved in the process of rural development. The state, private sector, international agencies and peoples'/producers' organizations are also important actors. There is a need for these various agents to act in harmony which requires mutual understanding of their roles.

Role of the state

· Evolve policy-making mechanisms that allow the representation of different stake-holders, making efforts to ensure representation of the poor, the inarticulate, sentient beings and future generations.

· Adopt a regional approach, as opposed to a standardized/uniform approach, in order to take into account the regional, socio-ecological, cultural differences.

· Give priority to the people who are most in need.

· Coordinate national policies with local needs so that conflicts between national and local goals can be resolved amicably.

· Revise the flow of resources from urban to rural sector.

· Adjust/correct the drawbacks of market mechanisms.

· Ensure that local knowledge is incorporated into the curricula of schools and colleges. The rapid erosion of local knowledge is a matter of grave concern.


NGOs are most suited to interface among all the actors. They should try to respect national structure and legal framework while ensuring that the needs of the people are met.


The private sector's role is to establish a partnership with rural producers. However, multi-nationals and large business houses often tend to exploit the farmers. They influence the choice of technology which can influence sustainability. These entrepreneurs are guided mainly by profit motives and do not have the benefit of farmers uppermost m their minds. They do not show concern for the sustainable harvest of these resources often driving them to extinction, and they fail to compensate the people who have helped preserve these resources for generations. Such businesses should take a more enlightened approach and adopt an ethical code of conduct. New institutional arrangements could work out compensation formulas between the local people and the prospectors of biodiversity. The INBIOS-MEREK agreement in Costa Rica, in which scholars designed a set of guidelines for evolving a code of conduct, is a model to draw upon. International funding organizations could play a role in the adoption of such a code of conduct.

Another way to bring pressure is to increase product awareness of consumers. Emergence of the small and medium private sector at grassroots level is an opportunity for rural development. This essentially refers to the promotion of entrepreneurship among primary producers, which was mentioned earlier. Promotion of "group entrepreneurship" may help to provide a broad base to such development.


Producers' organizations should negotiate with the other actors, make proposals to launch initiatives and monitor projects to safeguard their interests.


Apart from providing financial assistance, international agencies should establish networks for transferring information and competencies.


Formal research institutions have failed to come up with alternative, sustainable technologies at desirable rates. The short-term successes of the green revolution have proven to be a major obstacle to making scientists realize the necessity of working for non-chemical, low-entropy technological options. Scientists trained in Western scientific disciplines also tend to dismiss the innovations of farmers as unscientific or ineffective. Scientists stand to gain by learning from the heuristics used by farmers. Adoption of innovative heuristics in their own research may lead to new discoveries and technologies for sustainable agriculture.

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