Governance and local development A Framework for Rural Poverty Reduction

Characteristics of the rural poor The rural poor are caught in a low productivity trap Low human capital Limited access to physical and financial capital Limited access to information and to know-how Limited to product, factor and service markets

Causal analysis Economic causes for exclusion, low access: Rural poor are dispersed –High unit cost for establishing basic infrastructures –High unit cost for delivery of social goods and services –High market transaction costs –High unit cost for delivery of information and know how Socio political causes: Rural poor have little voice –Centers for political power and decisions on resources are urban –Cultural gap between decision makers and farmers –Low access to information –Weak human and social capital –High cost of consultations and consensus development

Good Governance?? Responsiveness (to needs of the rural poor) Transparency (of decisions and of delivery mechanisms of public goods and services) Accountability (on use of public funds)

Some side issues Governance here is applied to decision and delivery of public goods and services (PGS) The rural poor need a minimum set of PGS as precondition for accessing for assets, products, factors and services markets

Governance needs of the rural poor Responsiveness Decisions on processes and resources that are responsive to their concerns and specific conditions (opportunity for participation, fair share in allocation of public resources) Delivery systems for public goods and services adapted to rural conditions that are low cost (economic efficiency) and inclusive (equity) Policy and institutional environment favoring development of efficient product, input and service markets that are responsive to rural conditions and to agricultural production cycle

Governance needs of the rural poor Accountability and Transparency Rural poor need to know that the state owes them a minimum set of public goods and services Political officials and administrators need to know that they are accountable for the delivery of a minimum set of public goods and services Fora/Processes which provide up and down feedback (sanctions retributions) on delivery of public goods and services and on use of funds

CDD and governance for the rural poor CDD can enhance responsiveness to the rural poor: –More efficient information flows –More efficient delivery systems of public goods and services –More equal access –Increased voice into national decisions CDD can enhance transparency and accountability –Decentralized management systems –More efficient control mechanisms –Targeted information flows

Institutional implications for the design of CDD programs Clear separation in decisions processes, funding and delivery mechanisms between public and private goods and services and specific treatment for semi-public goods Promote institutional diversity and avoid institutional monopolies Transparent verifiable rules for consultation/negotiation/arbitration Need for approaches focused on the actors

CBOs as partners in CDD projects: Local government (rural communes) Village community organizations Farmer/producer organizations Decentralized rural finance Market oriented organizations (cooperatives, GIE) Common interest groups (GPF, Parent & youth associations)

CDD and governance: some examples Guinea PACV and Senegal PNIR: establishment of a consultative committee to the RC for preparing LDPs The demand for and the supply of private goods and services needed by the rural poor

Decentralization: A tool for improved governance? Can reduce distances (geographic, cultural, process related, etc.) between beneficiaries and decision makers Can improve responsiveness to needs of rural poor through: –improved adequacy of types and quality of PGS –improved efficiency in delivery of PGS (unit cost reduced) –Can enhance equity of access to PGS

What is Decentralization?? A political process of transferring responsibilities to local elected government –For assessing local priorities for public goods and services –For local delivery of public goods and services –Facilitating the emergence of a favorable environment for private initiatives and markets