May 2001
Part 3
The Peruvian state has been organized since Independence into four levels of government: the national (central) level, 24 departments, 189 provinces and the districts. The term municipalities, however, has been reserved for two distinct levels of government: the so-called district municipalities, which are supposed to be the basic cell of the state, and the provincial municipalities which are considered to be an intermediate aggregated level.
At the end of the 1980s, Perú was at a crossroads. Political violence, particularly in the Andean region, took more than 24.000 lives. This was followed by an impending crisis of governability manifested in the near disappearance of the traditional political parties. In 1990, the inflation rate reached the astronomic figure of 7.700% per year. The public sector deficit reached to 7.6% of the national product, while the external debt peaked to more than 13.000 million US dollars.
In 1990, a classical macroeconomic stabilization programme achieved the goal to reduce inflation from 7.700 percent in 1990 to 139 percent in 1991 and to 7.3 percent in 1998. In 1991, the external debt was renegotiated with the Paris Club, and in 1997 the country joined the Brady Plan to solve the debt with the domestic banks. A flexible exchange rate was declared, with some margins of manoeuvre given to the Central Bank.
The adjustment programme led to economic contraction, given the rise in interest rates over the level of profitability of the domestic economy, while the trend toward exchange rate overvaluation also punished the tradable economic activities. The contraction of aggregated demand, together with a drop in real wages, created a deep economic recession in most domestic activities, and particularly in the agricultural sector. It was not until 1993 that some signs of recovery of the domestic economy reappeared.
The 1979 Constitution created a new level of government: the regions, which sometimes aggregated two or more departments. Between 1988 and 1990 twelve regional governments were popularly elected, giving rise to a short-period of political decentralization. The creation of these regional governments, however, coincided with the highest point of the hyperinflation period and with the peak of the crisis created by rural violence and terrorist upsurge. Therefore, both the structural adjustment programme and the mounting crisis of governability of the country, undermined the financial viability of the regionalization process. In fact, together with the dissolution of the National Congress in 1992, the government dissolved the regional governments, substituting them by "transitory councils of regional administration" with no autonomy whatsoever. This trend also manifested itself in a series of laws and decrees helding back both the responsibilities and finances of the municipalities. The 1993 Constitution and the Law of Decentralization of 1997 sanctioned these de facto situations.
After the relative success of the macroeconomic adjustment programme, the government decided to pursue a second stage based on market deregulation, economic opening to the international markets, and a huge privatization programme for most public enterprises. The Decree 653 or Law of Investment Promotion in the Agricultural Sector, meant a complete setback of the agrarian reform process initiated in 1969. Most cooperative farms created during the reform process were parcelled giving rise to a landstructure today characterized by smallholders. The deregulation of agricultural markets, together with the withdrawal of the CG from most of the functions performed during the previous growth model, completed the task of giving rise to a market-led growth model also in the agricultural sector.
Few reforms have reached their goals (competitiveness, poverty reduction, environmental sustainability, governability), and some have even experienced serious short-circuits, although no serious evaluation has been carried out to assess these impacts so far or to assess to what extent their influence has affected beneficially - or otherwise - the livelihoods of the poor.
The need for political commitment and social consensus
Political reforms and democratization. The return to democracy in the South Cone countries: Brazil, Argentina, Uruguay, Paraguay, Chile, Bolivia. The impeachment of two Presidents: Carlos Andrés Pérez in Venezuela, and Collor de Mello in Brazil. Two parallel movements: top-down reforms promoted by multilateral agencies, and bottom-up reforms promoted by grassroots' organizations.
The table below illustrates this process:
(Lawrence Smith. 1999. Decentralization of Agricultural Services: A Training Manual. TCA-FAO. Pp. 13. Unpublished material)
The disappearance of the social and political consensus which underpinned the former centralized state, the state-led economic growth strategy, and the redistributive policies of the past. But the need for political commitment and social consensus. A "new social pact".
The contrast between national consensus for market-led reforms in Chile, despite political differences in secondary policy guidelines and procedures, vis-a-vis the evident lack of political and social consensus in Colombia, Venezuela, and Peru.
The multiple resistances to change. Firstly, the old-fashioned political elite which is struggling to survive and uses state intervention for maintaining their privileges and rent seeking. Secondly, the poor - the main losers in all regimes - lack safety nets and tend to perceive market-led reforms as endangering their livelihood strategies even more. Thirdly, most former public servants fear losing their jobs and social security. Staff may fear for their jobs, budgets and positions of influence. Transferring some of the agency's functions to farmer organizations may seem like the organizational equivalent of amputation, so it is far better simultaneously to develop a clear vision of the future for both the transfer units and the public agencies. If new roles are identified for the agency, staff will feel less threatened by transfer.
Without a real social consensus for state restructurings and market-led reforms, governability is no longer possible.
The need for legal reforms
The need to formulate a comprehensive legislative framework. If legal reforms are not comprehensive, some of the aspects left out may produce short-circuits and hinder the possibility of reform. A caveat, however, is always necessary: to avoid a legalist view of social and political changes. Laws are necessary, but they are not enough.
The need for a reform of the civil service
Reform of the civil service is the process of modifying rules and incentives to obtain a more efficient and committed labour force.
The need for coherence between macroeconomic stability and institutional reform goals
A relatively stable macroeconomic framework. Reforms of the public sector, particularly in the context of a market-led growth strategy, need a 'healthy' macroeconomic environment; in particular, a low rate of inflation, and budgetary and exchange rate equilibria. A strategy for the eradication of most political interference to an efficient allocation of resources, is thus needed. But also needed is a broad coverage of safety nets to protect the most vulnerable populations, and particularly the rural poor, against the negative economic shocks and risks. There is a need for coherence between national economic strategies, sectoral policies, and locally-based investment projects. All the case studies reviewed show the political, financial, and managerial weaknesses of the Ministries of Agriculture in the region. The compounded result of these weaknesses is not only a lack of technical and managerial capacity, but also a lack of a coherent long-term and strategic sectoral growth strategy. Management through projects has become the main instruments to the disposal of the agricultural and rural sector. This project approach to sectoral policy creates, however, an overabundance of ad hoc institutions with a short life span. Moreover, these generally locally-based or subsectorally-oriented projects are not designed to address the structural causes of rural poverty, and even less to redirect the sector into a growth strategy compatible with international competitiveness and technological modernization.
Financial conditions. Most subnational governments find it extremely difficult to raise enough funds relative to the cost of discharging their responsibilities. There are several factors explaining this situation. The point, however, is that at least at the beginning of the reforms there is a need to create 'intergovernmental financial transfers' from the National Treasury to the local governments, usually taking into consideration inter-territorial equity considerations. But, parallel to this, there is also the need to strengthen the capacity of local governments to raise their own funds, thus avoiding the emergence of 'transfer dependency' mechanisms.
Macroinstitutional conditions. The need to strengthen central government agencies, and to strike the appropriate balance between the responsibilities that should be assumed to the central government and those assumed by subnational entities. In particular, the capacity of central governments to ensure policy coherence should be strengthened, as well as their capacity to integrate grassroots demands into their own long-term view of economic growth and other social priorities.
In rural areas, in particular, a territorialized view of rural development should be created or strengthened. A view that considers microregional spaces based on agroecological, social, cultural and economic considerations as appropriate scenarios for development. A view that rural development which considers the competitiveness of agrifood activities, but also integrates other environmental and equity (e.g. income-based, ethnic, and gender) considerations. As opposed to a reductionist perspective of rurality as only linked to the poor and poor alleviation programmes.A market-led growth and open economy strategy needs a "healthy" macroeconomic environment; in particular, a low rate of inflation; and budgetary and exchange rate equilibria. The ultimate goal is the establishment of a regulatory framework that ensures safety and soundness, that creates confidence in the existence of a 'level playing field' for all economic agents. An adjustment strategy for the elimination of those non-economic mechanisms that interfere with the efficient allocation of resources, reducing transaction costs.
The need for coherence between national development strategies, sectoral policies and investment projects
The political weakness of the Ministries of Agriculture vis-à-vis other Ministries of the Economy. This weakness is revealed not only in the funds allocated to the sector, but also in the overvaluation of currencies and the lack of instruments available for public agricultural (and rural) policies. This is also revealed in the lack of qualified civil servants, as a result of migration to the private sector. The final result is not only a lack of technical and management capacity, but also a lack of a coherent sectoral growth strategy embedded within the overall goals of international competitiveness and technological modernization.
Management through projects usually financed by multilateral donors - sometimes as a way to bypass state bureaucracies and inefficiency. For instance, special payroll systems. The emergence of ad hoc institutions, with a short life. A plurality of different institutional procedures. They provide flexibility but lack long-term sustainability. Moreover, they are not designed to address the structural causes of poverty.
As far as agriculture is concerned, there has recently been a new development resulting from what could be termed 'the project quarrel'. Whereas at the end of the colonial period and at the beginning of independence, agricultural policy issues were mainly in terms of institutional choices (socialism or liberalism), after the mid-1960s, and until recently there was a tendency for administrations to limit their roles to the management of a variety of 'projects' proposed by various organizations, either local or, more frequently, international. As a consequence, plans had a tendency to become mere lists of investment projects, not necessarily coherent. As has been noted by Griffon (1988), "rather than by plans, general lines of agricultural policies were in fact defined by formal or informal contacts between donor agencies, often on good terms with local authorities". Such an approach has the merit of being practical and posessing a certain empirical efficiency, with discussion mainly focused on micro-economic issues. Its drawback was that macroeconomic consequences of choices were often neglected… Too many projects, some of them being poorly designed, with no concern for general equilibria… The emphasis put on structural adjustment, to some extent, correct this tendency. It is now necessary to think about agricultural policy in terms of global equilibrium, balance of payments and rate of exchange… In such a context, there is a temptation to leave out the 'projects approach' and to be content with macro-economic policy… With the project approach, governments (or other NGOs) directly supply farmers with services such as roads, irrigation facilities and market organization. An effort to state the conditions under which they could be complementary (the macroeconomic and project approaches).
Local governments do not appear capable of planning beyond assembling projects shoping lists.
In the long run, training local administrations and civil servants is one way to handle the problem. In the short run, mechanisms could be designed that would force the relationship to be taken into account when budgets are prepared. To train local officers in budgeting techniques and in projecting the impact of current investment choices against the limits imposed by the future budget ceilings.
The problem arises when a new project, based on clientelism and lobbying, destroys years of efforts at changing the managerial culture of civil servants.
Financial conditions
To be effective, territorial decentralization reforms require financial resources to be transferred to subnational levels of government. A common problem in all reviewed Latin American cases was that few subnational governments, and local governments in particular find it extremely difficult to raise enough funds relative to the cost of discharging their responsibilities. This is usually the result of: a) a poor tax base; b) the reluctance of politicians to take unpopular measures; c) the resistance of potential tax payers who have little confidence in the capacity of the local administration to put the money to good use; and, finally, d) the widespread feeling that it is the 'rich' CG that should take care of the need of the 'poor' local administrations (cfr. TCD:99). Therefore, there is usually a continuing need for financial transfers from CGs or donors. This creates many problems relating the level of autonomy of these subnational governments, the rise of transfer dependency mechanisms from CGs, as well as problems of accountability and responsibility.
To complement local revenues, the CG creates so-called "intergovernmental financial transfers" from the National Treasury to the local government accounts. Equity considerations.
These funds may involve the transfer of financial resources on a lum sum basis or on a matching grant basis. Lump sum grants can be unconditional or conditional. The CG may specify which activities are to be funded by the grant or specify a list of activities that cannot be funded. The CG may also dictate the standards for the provision of goods and services. Matching grants, by contrast, include the condition that local governments must fund a share of the cost of the goods and services provided with the grant money. They also usually specify the cost recovery measures, and may even establish a 'no bail out condition' which states that the CG will not rescue the subnational government commmiting expenditures beyond available resources (TCD:102-103).
"Proper instruments and mechanisms for intergovernmental fiscal transfers are necessary for more effective development management at the local level. While local revenue generation may be a better way to increase accountability, it is limited by the low elasticity of local revenues and the restricted revenue base in rural areas. Therefore, in most countries, there is a need for a national redistributive grant system to supplement local resources. The grant system itself must be well designed to avoid mismanagement and inappropriate incentives. Local revenue sources should be used as much as possible for funding local government expenditures. Simple, objective and transparent transfer systems must be established to supplement local revenues, because sources of income often are very limited in rural areas" (TDC 41).
Decentralization, centralisation and recentralisation
Who needs a weaker government? Just the contrary; inasmuch as the agents of civil society are more organized, a stronger and more sophisticated government is needed.
To avoid a "premature celebration of the local"… Decentralization works for the poor only when key technocratic and political conditions are met (WB: Jan 17 2000: S.11).
To search the appropriate balance of centralization and decentralization. Even when CGs decentralize responsibilities, they often retain important policy and regulatory roles.
The increased responsibilities given to local actors do not mean that the CG no longer has important functions to carry out. It must especially ensure policy coherence, and this requires the building of interfaces between the different levels of government, making it possible to integrate the demands and initiatives at the lower levels with national coordination and guidance.
The success of the reforms frequently depends heavily on training for both central and local officials.
Strengthening the CG as a condition to decentralize: strong vs. weak institutions: the Ministry of Agriculture vis-à-vis the Ministry of Finance (cfr. Budgetary allocations) State shrinkage without a strategic perspective of the roots of social conflicts, may lead to increased violence and loss of governability.
The parallel state: self-sustained programmes and projects with international funding; development funds without central-decision-making and directionality; lack of transparency in the "contracting out" business (NGOs); addressing new actors demands strategic thinking and not only organizational reforms.
"The experiences reviewed in this book did not confirm the picture of local governments and nongovernment providers as being inherently better at tailoring services to client needs, or as having the comparative advantages assumed by the development literature. The book's findings confirmed the ironic 'paradox of decentralization' so aptly identified by Rudolf Hommes, an ex-minister of state in Colombia, one of the countries that has taken decentralization quite seriously. Decentralization, Hommes said, 'demands more centralization and more sophisticated political skills at the national level'" (Tendler 1997: 142)
"In the poorest countries large numbers of donors with multiple projects cutting across each other, with donor each requiring separate accounting procedures. This lack of donor coordination, and lack of ownership of the development assistance agenda, is a major cause of the ineffectiveness of aid in fighting poverty… "My cases did not confirm this scenario of a two-way dynamic and a diminishing CG. They revealed, rather, a three-way dynamic that included an activist 'CG', as well as local governments and civil society. The state government took certain traditional powers away from municipal governments,while at the sametime devolving others... It was not that the CG continued to do what it had done in the past, but that it was doing something different and quite actively so. The CG was also contributing in a major way to the creation of civil society by encouraging and assisting in the organizing of civil associations, including producer groups, and working through them. These groups turned around and 'independently' demanded better performance from government, both municipal and central... This complicates the currently popular assumption of one-way causality, according to which good civil society leads to good government and, correspondingly, good government is dependent on the previous existence of a well-developed civil society" (Tendler 1997).
CG-local government links: "Los gobiernos nacionales pueden tener tres instrumentos para direccionar a los gobiernos subnacionales hacia los objetivos que persigue: subsidios selectivos, transferencias, mandatos. Si el GC desea igualar las capacidades fiscales de los municipios lo mas recomendable será usar las transferencias de ingresos. Para el diseño de los programmeas intergubernamentales se debe encontrar una combinación adecuada de incentivos y restricciones para canalizar la iniciativa local en la dirección deseada".
Recentralization in this paper is referred to as the emergence of governance institutions which result from supranational and multinational trade agreements between countries. This is an aspect of the new institutionality of the rural and agricultural sector that has often been omitted, but requires in-depth exploration in the future.
Microinstitutional re-engineering
A major practical issue to be addressed by the institutional reforms concerns the extent to which subnational governments have the administrative and technical skills to provide the services for which they assume responsibility? Territorial decentralization, it may be argued, helps to improve the quality of the services rendered, but how can this be possible if subnational (regional or local) organizations have inadequate capacity? Opponents of the decentralization process may use this argument to avoid loosing positions of influence and power (cfr. TCD:81).
Capacity-building at the local levels should be a prime component of decentralization programmes. Local governments, in particular, should have access to appropriate administrative skills regarding the legal environment, hiring skilled personnel, negotiating with other public agencies and private firms, developing their own fund-raising strategies, monitoring and evaluating short-term investment projects and long-term programmes. The question is where can these skills be obtained, and how to pay for them.
Those concerned with the implementation of these reforms (in Colombia) generally point out the limited capacity on the part of subnational governments as a key constraint. It has often been argued that limited capacity could become a binding constraint for decentralization, particularly considering that the municipalities had to develop the capabilities to perform effectively the new duties starting with little or no tradition of public administration and local governance. The experiences of most Latin American decentralization processes suggests that there exists a vicious circle of low administrative capacity and fiscal poverty among local governments, in which insufficient financial resources limit investments in capacity, which discourages the allocation of new functions on the part of the national governments, as well as local capacity to mobilize revenues.
The emergence of a vicious circle that could be critical for the sustainability of the process of local capacity development. Responsible leadership and community participation lead to an increase in demands for better governments and, consequently, for capacity enhancement. More capable governments tend to attract more qualified and better motivated leaders and staff.
The forces driving local capacity development. The quality of the staff… The government management style, including aspects related to: structure and distribution of functions and responsibilities within the organization; management, planning, decision-making and control of evaluative functions; and information gathering, processing and distribution… (Harris 1983; Fiszbein 1997). A key challenge is to adapt the organization to more complex and diverse tasks. This requires changes in leadership style. Leadership plays a key but different role at various stages of the capacity development process: launching it requires drive and a clarity of objectives; while consolidation and institutionalization require managerial skills. The presence of an active community increased demands for effective local governments, generating the incentives for capacity building. In other words, community participation forced government accountability. At the same time, it broadened the resources on which the municipal administration could draw upon to improve its capacity. Developing adequate personnel policies --recruitment, promotion rules, staff motivation, pay scales-- and formal training programmes constitute the main challenge for municpios attempting to improve the quality of their staff. Small and remote municipios experience particular difficulties in upgrading the quality of their workforce. In the first place, scale imposes a natural or structural limit on the number of professionals working for the municipal administration. A majority of rural municipios simply cannot afford the expenses of a cadre of adequately remunerated professionals in the different areas of government responsibility. Secondly, the cost of hiring even a few well-qualified professionals might be too high for many small municipios that would have to attract them from other places. There is a need to upgrade the capacity to plan, that is, to establish goals and the means to achieve them. In addition to satisfying technical criteria, planning under the system of decentralized governance must also reflect the needs, preferences and priorities of recently enfranchised citizens. Thus, local governments must combine their efforts to develop conventional planning skills with new methods to elucidate community demands. While small-scale municipios do not have fully-fledged development plans, most have a listing of investment priorities. But sometimes they lack the operating tools for day-to-day activities. When the municipios have involved the community in the preparation of plans --documents-- they become more politically sustainable. It is at the level of implementing investment projects, particularly ambitious ones, that most municipios face capacity limitations. But municipios must learn to operate in an institutional and legal environment that changes at a fast pace. In spite of repeated efforts by the different levels of government, most municipios still find the legal and regulatory framework which governs them complex and confusing. Insufficient channels of communication between levels of government make it difficult to reverse this environment. To a certain extent, these tensions reflect the difficulties on the part of national leaders to adapt to a new environment in which the centre has lost its monopoly of power. A factor hampering the ability of some local governments to consolidate their capacity-building efforts is the barrage of national programmes for institutional development that operate in an uncoordinated manner. The paradoxical result is that these programmes end up forcing on them an inefficient use of their time and human resources, overwhelming rather than strengthening their capacity.
Capacity-building may require training of existing staff, hiring new staff or sub-contracting services.
Municipal Commonwealths (Mancomunidades de Municipios). One of the institutional development schemes most frequently used at the local level is the association of two or more municipalities with a view to taking advantage of economies of scale in management and administration and/or to facilitate horizontal transfer of management technologies.
The absence of a urban/rural view of territorial development. Microregional spaces. Schejtman's view of the need to value the role of cities and regional markets in territorial (rural) development. This new territoriality emerges from the complementary processes of globalization and decentralization.
Agricultural production is still the core of economic life in most of today's rural populations, although "the rural" cannot be reduced to farm activities. Rural development goals should not be based only on equity considerations. Other pressing needs are: competitiveness, adding value to the environment, while protecting the natural resource base. Giving priority to market demand instead of farm supply supposes to rethink the links between farm production, agroindustrial processing, and marketing. The productive and value chain. From "sectoral" Ministries to plurisectoral business.
The rural: beyond agriculture. The rural as a territorialized view of development based on agroecological, social and economic considerations. The specificity of resources, lifestyles, institutional configurations. A scenario for all types of economic transactions. The localization of public policies. Instead of a reductionist perspective of the rural as only linked to poor alleviation programmes.
Natural resources are location-specific.
New rural economies: pluriactivity (a widening scope of the rural economy from primary production to tourism, leisure and environmental public goods), vis-à-vis the "old rural economy" linked to agriculture.
There are no obvious models of state reform that are clearly suited to all cases. Besides, depending on political junctures, former legal frameworks, fiscal and economic conditions, institutional capacity, the strength of grassroots organizations, and the degree of social and politica consensus - the goals assigned to the reforms may vary. Top priorities may be: increased competitiveness as a result of productive and allocative efficiency, livelihood sustainability of the poor as a result of equity considerations, and increased popular participation, democracy and governability. Best practice, therefore, has to be adapted to each particular set of objectives and circumstances.
The economic rationale: productive and allocative efficiency
Economic theory provides the economic rationale for government intervention in market economies. They are "market failures": the existence of public goods, externalities, asymmetric information, and monopoly. Besides, there might also be political as well as equity considerations.
The theory of public goods explains one reason for possible government intervention in a market economy. The existence of goods and services with the properties of 'non-exclusability' and 'non-rivalry', which cannot be provided efficiently by market mechanisms alone.
A wide range of goods and services also create 'externalities', i.e. benefits or costs to people who are not directly involved in their production and consumption. Therefore, public regulatory procedures concerned with controlling the sources and/or consequences of these externalities are needed.
Another form of 'market failure' is asymmetric information. This occurs when one party to a transaction has much more information than the other and uses it to deceive the other. In these cases, an intervention is needed to correct market distortions. Regulatory services may also be needed to provide improved market information to participants.
Finally, the abuse of market power by the monopoly power of certain economic agents also calls for public intervention, in order to restore transparency to the competitive mechanism. One way may be to legislate in order to restrict the practices of monopolies. Another is encourage producer associations to collectively bargain against monopolistic traders, or to undertake their own transactions collectively.
Of course, not all problems of market failure need to be dealt with by the CG. Many are more appropriately dealt by subnational (regional or local) governments, or by voluntary associations of producers or consumers. Even in these cases, the CG can play an important role in facilitating the operations of these voluntary associations.
There are also cases of 'missing' or 'incomplete' markets, in which a public authority or government can play important roles for creating the conditions for market mechanisms to exist, or to increase their effectiveness. Reasons for these missing market conditions are: a) lack of information about market opportunities; b) difficulty of assessing risks, or risks which are considered to high relatively to expected profits; c) economies of size, making initial small investments uneconomic; d) lack of infrastructure (eg. roads, transports) or complementary market services (eg. finance, insurance).
The political rationale: accountability, citizens' participation, and democratization
The case for decentralization is often based mainly on political and equity considerations. Yet, the political objectives to increase accountability, citizens' participation, and democratization may coincide with the economic objectives of better allocative decisions for public resources and increased willingness to pay for local services.
The equity rationale: social, territorial and environmental sustainability goals
It is generally recognized, however, that market forces alone do not resolve equity problems. Social, territorial and environmental sustainability goals also form part of most reform goals.
The specific services to be decentralized will depend on economies of scale affecting technical efficiency and the degree of spillover effects beyond jurisdictional boundaries.
"To identify the role of government: both what the government should do and how it should do it. And the question should not be whether a particular activity should be carried on in the public or private sector, but how the two can best complement each other, acting as partners in the development effort… What tasks should be undertaken at what level of government, and how governments can most effectively interact with 'civil society', creating the conditions that are most conducive to the transformation of the whole society… A focus on the public sector on the unique functions that it must perform, such as: creating the enabling environment for the private sector… ensuring that services are available; spearheading the drive to eliminate poverty; strengthening the capabilities of the public sector, including the development of an effective civil srvice, and a restructuring of the public sector, to make more effective use of incentives and of market and market-like mechanisms; and a matching both of responsabilities and modes of operation to the capabilities of the State" (Stiglietz 1998:25)
Fortunately there is now a clear distinction between the provision of goods and services and their production. The provision of any goods and service is composed of four functions: a) Financing. Someone has to supply or pay for the resources; b) Production. Someone has to organize and undertake the function of combining the various resources together to create the goods or service that is required; c) Regulation. Market cannot exist in an institutional vacuum. The transaction of any good or service is always governed by implicit or explicit rules. To be effective there have to be mechanisms for monitoring and enforcing these rules. d) Consumption. All goods and services are produced to be consumed.
The point is that there is absolutely no requirement for all these functions to be undertaken by the same public or private agency. Each can be performed separately. Governments may encourage the provision by influencing any of the four functions in ways that reduce transaction costs (thus risks and uncertainties).
State reforms are long-term changes. They frequently occur in an environment of strong economic and social tension. But they suppose a slow and heterogeneous process of institution-building by social agents to become embedded into new rules and social institutions that mirror civil society needs. So far it has been a slow and fragile process, frequently made ransom by political contingencies. A more complex nation-state now comprising not only a CG, but also subnational (regional and local) governments that establish cross-sectoral links is called for. This process would be incomplete if it does not link to supra-national structures, such as the plethora of regional trade agreements that are emerging both in developed and developing countries. To some extent, each one of this institutions should be able to set up their own public policy agendas and investment projects.
There is some directionality: from centralized to more decentralized decision-making. But there is no linearity in the process. The reforms are the result of bargaining processes among different stakeholders, which also involves the relationship with a plethora of supranational agents. There is a need to facilitate inter-actions between the different layers of the development equation both up and down-stream.
One of the assumptions of the reforms is that there is a civil society; therefore that decentralization would make the decision-making process more transparent and democratic. Civil society, however, cannot be considered as an homogeneously virtuous group, keeping wayward governments on the right track and working its magic best on local governments. During the reform process, important fractions of civil society might struggle to perpetuate their longstanding privileges, while others might pressure for deepening democracy and getting rid of former privileges.
Most Latin American countries are now in a 'middle of the river' situation. Only if a broader social and political consensus is achieved are reforms to be sustainable. The need for a new social pact in which the rural poor, still the majority of the impoverished, and the need for an equilibrated territorial development are considered. In the interim period, governments are often marred by perplexities. It is under those circumstances that they most require technical support from agents that might assist them visualize the light at the end of the tunnel.
Bebbington, Anthony. 1997. "New States, New NGOs? Crises and Transitions among Rural Development NGOs in the Andean Region", World Development 25(11):1755-1765.
Bebbington, Anthony. 1999. Capitals and Capabilities. London: International Institute for Environment and Development.
Bernal, Fernando. 1997. "Colombia: Rural Decentralization, Local Government Performance and its Determinants", Bogotá: IICA-World Bank. Unpublished paper.
Echeverri, Rafael et al. (eds.) 1996. Descentralización en el agro: El Desarrollo Agropecuario y Rural en el marco de la descentralización y la regionalización. Bogotá: Ministerio de Agricultura and IICA.
FAO. 1999. "A Sourcebook on Decentralization in Agricultural and Rural Development", draft version 17 August 1999. Unpublished material.
Fiszbein, Ariel. 1997. "The Emergence of Local Capacity: Lessons from Colombia", World Development 25(7):1029-1043.
Fox, Jonathan. 1995. "Governance and Rural Development in Mexico: State Intervention and Public Accountability", Journal of Development Studies 32(1):1-30.
Gershberg, Alec Ian. 1998. "Decentralization, Recentralisation and Performance Accountability: Building on Operationally Useful Framework for Analysis", Development Policy Review 16:405-431.
Held, D. 1995. Democracy and the World Order. Cambridge: Policy.
Instituto de Cooperación para la Agricultura (IICA). 1996. Modernización de la Institucionalidad Pública y Privada para el Desarrollo de la Agricultura y el Medio Rural. San José: IICA. Unpublished material.
Llambí, Luis. 1998. La Reforma del Estado en Venezuela: El Sector Público Agrícola y el Proceso de Descentralización. Caracas: Fundación Polar.
Machado, Absalón. 1999. Organización pública agropecuaria. Bogotá: CEGA.
Maetz, Materne and María G. Quieti. 1987. Training for Decentralized Planning: Lessons from Experience. Rome: FAO.
Manor, James. 1997. "The Promise and Limitations of Decentralization", Technical Consultation on Decentralization for Rural Development, 16-18 November 1997. Rome: FAO. Unpublished material.
Martínez Nogueira, Roberto. 2000. "La Reforma Institucional y la Reforma del Sector Público Agropecuario: Avances y Tareas Pendientes". Paper presented at the Interamerican Development Bank (IDB) Annual Meeting of the Board of Governors, New Orleans, March 24 2000. Unpublished material.
Nugent, Jeffrey B. 1993. "Between States, Markets and Households: A Neoinstitutional Analysis of Local Organizations and Institutions", World Development 21(4):623-632
Plaza, Orlando. 1998. Desarrollo Rural: Enfoques y Métodos Alternativos. Lima: Pontificia Universidad Católica del Perú (Fondo Editorial).
Piñeiro, Martín et al. 1998. La Institucionalidad en el Sector Agropecuario de América Latina: evaluación y propuestas para una reforma institucional. Buenos Aires: Grupo CEO-BID (IDB).
Reca, Lucio and Rubén Echeverría. 1998. Agricultura, Medio Ambiente y Pobreza Rural en América Latina. Washington, D.C.: Interamerican Development Bank.
Reno, Fred. 1993. "Local Government and Decentralization in the English and French Speaking Caribbean: A Comparative Perspective", Caribbean Quarterly 39(2):14-25.
República de Bolivia. 1999. Política Nacional de Desarrollo Agropecuario y Rural. La Paz: Ministerio de Agricultura, Ganadería y Desarrollo Rural.
Rondinelli, D.A. 1988. "Government Decentralization in comparative perspective: Theory and practice in developing countries", International Review of Administrative Sciences 47(2).
Tendler, Judith. 1997. Good Government in the Tropics. Baltimore and London: The John Hopkins University Press.
Uphoff, Norman. 1997. "Institutional Capacity and Decentralization for Rural Development". Paper presented at FAO's Technical Consultation on Decentralization for Rural Development, 16-18 November 1997. Rome: FAO. Unpublished material.
Varios. 2000. "Tendencie y Desafíos en la Agricultura, los Montes y la Pesca en América Latina y el Caribe". Santiago de Chile: Oficina Regional de la FAO para América Latina y el Caribe. Unpublished material
Vermillion, Douglas L. and Juan A. Sagardoy. 1999. "Transfer of Irrigation Management Services: Guidelines", FAO Irrigation and Drainage Paper No. 58. Rome: FAO.
1This is usually referred to in the decentralization literature as "partnership", conflating both the transfer to grassroots organizations, non-governmental organizations (NGOS)
2The last two Constitutions (1961 and 1999), have defined the country as a unitary state composed of a CG, 23 (subnational) states, and autonomous local governments or municipalities.
|
