Local Organizations in Development

March 1984

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Executive Summary I. Introduction II. Types of Local Organizations III. The Role of Local Organizations in USAID's Program IV. Overcoming Limitations of Local Organizations V. Policy Implications 21     II. Types of Local Organizations The term "local organizations" includes a broad range of enterprises, agencies, associations, and authorities that stand between the populace at large and the national level organizations that play dominating roles in the determination of development policies and the allocation of resources. Examples of local organizations include local governments (e.g., county councils), local offices of national administrative agencies (e.g., district commissioners and their staffs), primary cooperative societies, political party branches, and private businesses (including firms intermediary support organizations such as banks, and trade unions). In fact, none of these categories of local organization is wholly distinct from the others. Political parties are often voluntary associations also, and all the other types of local organizations will also usually have a political side to them; many voluntary associations (e.g., cooperatives), may also be viewed as private enterprises; local government may often be indistinguishable from the local private sector where, as is often the case, business leaders predominate in the elected ranks; and the lower levels of administration (chiefs, sub-chiefs, village agricultural agents, etc.) will also usually be very active in local voluntary associations, political parties, local government, and private business. In addition, there are usually local bodies (e.g., district development committees) in which representatives from all types of local organizations meet to set local priorities and settle disputes. Local organizations engage in significant development efforts of their own, but they also respond to or mediate decisions made in central government; stated differently, people experience central initiatives largely through the local organizations of which they are members, clients, or constituents. In fact, the impact of virtually all national development interventions, as well as international donor assistance, is conditioned by intermediary local organizations of various types. Local organizations also constitute vehicles through which people can make their views known, or by means of which they can lay claim to resources emanating from the center. In giving support to policies and programs that strengthen local organizations, USAID is both increasing the likelihood that resources committed at the center will have some impact on the population in general, and helping to ensure that the voice of the people will be heard in decisions regarding policy and the allocation of national resources. However, local organizations are in no sense a panacea for all development ills, and working with them brings up some issues that are not ordinarily confronted in dealings with national-level institutions. This paper outlines both strengths and weaknesses of various types of local organizations, the linkages among local organizations, and the linkages between local organizations and broader regional or national entities. The range of various development-related organizations and linkages among them are discussed below.1 A. Local Administration Local administration includes local representatives of national administrative agencies, such as district officials responsible for agriculture and health development, representatives of executive office (e.g., district commissioners), the judiciary, and law enforcement agencies. Deconcentration, that is, the transfer of specific administrative powers from central agencies to their representatives in local offices, is perhaps the most common approach to expanding the role of local administrations in development. USAID supports the transfer of appropriate central functions to regional or district staff to improve the planning, implementation, and impact of development activities. B. Local Government The character of local government organizations varies greatly across countries, and is consequently difficult to define. Specific examples include county councils and municipal authorities. Although there are exceptions, "local government" refers to public bodies: with specific legal authorities; providing a range of services; with some capacity to generate local revenue; with accountability to a geographically-based local constituency; and which are substantially independent of central or local administrative agencies. Local governments are vital and powerful in some parts of the world today, and very weak in other places. The administration of essential government services (e.g., maintenance of roads and domestic water supplies), which would otherwise be the business of over-worked central bureaucracies, tend to be better handled by local government agencies when they are allowed, to do so and have the necessary resources. Moreover, effective local governance can foster and expand the role of private enterprise in development through appropriate policies in the areas of land use, taxation, and the like. USAID encourages the devolution of national authority to local government as one way to overcome the inertia and wastage associated with an exclusive dependence on national public organizations, but recognizes that successful devolution depends on strong administration and political stability in the center. Further guidance will be presented in a forthcoming policy determination on local governments. C. Voluntary Associations Voluntary associations are extremely common and extremely important intermediary organizations, often present in many different forms, and often very active in local development. These organizations may recruit members on the basis of residence (e.g., village development committees), economic function (e.g., a coffee marketing cooperative), age (youth associations), sex (women's groups), ethnicity (tribal unions), common property interests (water users' associations), occupation (trade unions), belief (church community development groups), and various combinations of these. Local organizations of this type, which are fundamentally action-oriented and private in nature, became increasingly important in the Agency's program during the 1970's, but remain relatively poorly understood. Incorporating them into planned programs of development generates a fundamental conflict. Such organizations are formed to serve particularistic, even parochial, purposes, and serve clienteles that are often rather narrowly defined; if they relate to central authorities at all it is to gain access to outside resources. Central authorities, on the other hand (and this includes donor agencies), usually see local voluntary associations as a channel for controlling development processes in rural areas, ordinarily try to tie new resources to changes in the extent or focus of association activities, and are often reluctant to allow much in the way of independent action.2 USAID programs that involve local voluntary associations must accommodate this fundamental difference in perspective by ensuring that coopted voluntary associations are able to maintain a substantial degree of fiscal and administrative autonomy. D. Political Parties Political parties are usually (not always) voluntary associations, but are distinguished separately here not only because they constitute a distinctly different channel through which local needs and priorities can be stated, but also because local representatives to national assemblies can have a major influence on the allocation of public resources to particular areas. Although there is relatively little that USAID can or should do directly in the arena of local politics, it is important for USAID to incorporate some understanding of this mode of local organization into the program development process. E. Private Enterprise Local private enterprise includes a wide array of small scale enterprises, including manufacturing, wholesale and retail trade, and services; and a variety of business organizations ranging from self-employed artisans to sole proprietorships, family businesses, small workshops, and cottage industries. In any particular country setting, enterprises with few workers, few and inexpensive fixed assets, and high labor intensity constitute "small scale private enterprise" as defined here. Small scale private enterprises are particularly important because they may efficiently generate needed employment; they perform essential agribusiness functions (processing marketing, and input distribution) that stimulate agricultural growth; they contribute to the decentralization and spread of industrial development; and they are efficient users of capital. F. Informal Indigenous Organizations All of the local organizations discussed so far are relatively formal, insofar as their responsibilities and authorities tend to be defined in legislation, regulations, written charters, contracts, and so forth. There are other local organizations, more informal in nature, that are grounded in aspects of the social order and which play important developmental roles. These may be termed "informal indigenous organizations," and often serve as an interface between individuals and the more formal local organizations discussed above.3 Informal indigenous organizations include kin groups (clans, families), work groups based on festive or exchange labor, dance societies, agegrades, neighborhood associations, and other similar social units.4 These types of groups, often unknown to outside observers, may either crosscut or provide the building blocks for more formal local organizations, and are important because they constitute the basic social context which may determine patterns of membership and activity in the broader units. For instance, many rural enterprises are family-owned and operated, a fact which strongly influences the economic behavior of these firms. Local government is often dominated by traditional lineage, caste, or hamlet loyalties, which have a profound impact on patterns of resource allocation. The work of local administration, for instance in adjudicating disputes over land and water rights, will often entail interaction with indigenous land-holding or water-managing groups. Political parties, of course, are often based on regional or ethnic identities, and the election of party delegates or parliamentary representatives is usually an occasion for intense conflict between opposed local social groups of one sort or another. In short, membership and power in local organizations of all types runs along lines determined by pre-existing social ties, and some understanding of the nature of community level social organization is required to understand the dynamics of local organizations and how they may respond to or generate development initiatives. Thus, USAID will ensure that projects involving local organizations give full consideration to the local socio-economic and political context that influences local organization performance. G. Linkages Local organizations do not exist and function in isolation from one another or from central authorities. Because local leaders are ordinarily active in a variety of organizations, there may be close linkages (growing out of personal ties) between local government, local private enterprise, and various voluntary associations, including political parties. Other linkages are based not on personal but on functional relationships. For instance, local administrative offices will often regulate and provide technical and/or financial assistance to local organizations such as cooperatives, private businesses, and water users' associations. Marketing cooperatives may lease vehicles from private traders. Local government regulates and may either support or stifle local enterprise, depending on the content of policies. The Esman and Uphoff study cited earlier has shown that supportive horizontal linkages of these types increase the chances that specific local organizations will be successful. Providing support for new organizations outside the existing network of institutional linkages may thus be ineffective. Furthermore, offering outside assistance that enables or encourages existing local organizations to withdraw from this supporting network may over the long term be counterproductive. Finally, because of the supportive horizontal linkages, outside support for the development of local organizations may often be more effective when undertaken indirectly rather than directly. For instance, most programs to stimulate small enterprise in LDCs focus on the enterprise itself, e.g., by providing additional funds and technical assistance. But under some circumstances it may be a more effective stimulus to small enterprise to focus on reform of local government tax or land use policies. Indirect assistance of this sort may not always be possible, but it should be considered as an option. Complementarities also tend to exist between local organizations and broader entities. Primary cooperative societies, for instance, must usually participate in regional and national federations; local enterprise requires stable links to large wholesalers or markets; and local administration needs easy two-way communication with central offices. As obvious as this may appear, the development literature is rife with examples of development projects that failed to achieve stated objectives because important linkages to essential organizations or institutions were never made. It is for this reason that USAID has determined to give explicit consideration to the strengths, weaknesses, and linkages among local organizations, as well as those between local and national organizations, before embarking on programs of development that explicitly or implicitly depend on local organizations for successful implementation. Five categories of developmentally-significant organizational linkages may be distinguished:5 finance linkages: credit, savings facilities, grants, commodity support. regulation and monitoring linkages: audits, administered prices, regulated financial procedures, registration and/or certification of organizations, imposition of uniform standards, inspections, evaluations. technical assistance linkages: training, secondment of staff, managerial and technical advice. service linkages: provision of inputs, performance of complementary tasks. representative linkages: formal or informal local participation in planning implementing, and evaluating programs, whether through patron-client networks, political parties, community development groups, or other means. National agencies may use one or several of these linkages to strengthen or influence the performance of local organizations. Regulatory and monitoring linkages tend to be used to control local organizations, while other forms of linkages may be used to assist them without imposing controls. However, most assistance linkages can become control linkages if the superordinate national agency is determined to dominate the local organization or if the assistance is provided too long and engenders dependency. USAID as a donor agency will often be in the position of supporting local organizations through intermediary superordinate organizations, and so the problem of selecting suitable national intermediaries and instituting appropriate national--local linkages is a crucial one. Missions should bear in mind the following strategic principles: Commitment vs. technical capacity: If the intermediary national organizations are to support local ones effectively, they must have both commitment to expanding the role of local organizations as well as the appropriate technical capacity. A program of community water development, for instance, might require both engineering skills and the willingness to work with local groups. The national ministry of water development might have the technical capacity but lack the commitment to work with communities, whereas the national ministry of local administration might have the commitment but lack the technical skills. Of the two, commitment is most difficult to instill. USAID should Select intermediary implementing agencies primarily on the basis of commitment, recognizing that technical capacity can be built up more easily than commitment. Technical assistance linkages: Once a national level intermediary, agency has been chosen, missions should consider two alternative models according to which they may furnish advice and assistance to local organizations. One model assumes that the local organizations concerned (e.g., a cooperative, a local government) will eventually have the capacity to perform the technical or administrative function itself. Hence the technical assistance is aimed at budding local capacity. An alternative approach recognizes that some organizations will never develop their own trained staff, either because the scale of the organization is too small, the required function is too specialized, or because the local-level career and lifestyle opportunities for the requisite professional staff are too limited. In these circumstances a national cadre of skilled advisers is required to furnish technical assistance on a continual basis, and the emphasis is on budding national capacity rather than local capacity. USAID should try to locate reserves of national expertise in parallel, service-oriented private institutions rather than superordinate public agencies to guard against the tendency for national assistance agencies to assume excessive control over the assisted organizations. Multiple linkages: Most programs, whether explicitly "integrated" in nature or not, are dependent upon stable performance from a system of institutions, the failure of any one of which will generate failure of the program. The solution is not necessarily to strengthen particular organizations-which may fail anyway-but rather to provide for multiple organizational linkages. For instance, rather than strengthen a central fertilizer agency (or monopoly import company), it may be more effective to encourage a multiplicity of private wholesalers. This gives farmers both public and private sources and helps to ensure availability of needed supplies. Second, rural development problems are inherently difficult to analyze, and there may be disagreement about correct solutions. It then makes sense to initiate several alternative approaches, knowing in advance that some will fad-but this strategy increases the likelihood that a viable institutional approach will emerge. USAID requires greater flexibility in forging institutional systems, and greater Willingness to tolerate or even initiate multiple organizational linkages is an important part of this. Administrative simplification: The Leonard study cited earlier offers some program maxims that appear obvious but are often neglected: single function organizations are more likely to perform well than multi-function organizations small agencies are less complex than large ones; complexity grows with the number of levels in a bureaucracy; the market is administratively, simpler than a bureaucracy; benefits targeted for a specific subgroup (e.g., women farmers) are more difficult to administer than benefits that are more general (e.g., smallholders); and finally, complex procedures, like complex organizational structures, generate program failure and reduce the access of intended beneficiaries to planned benefits. There is a general presumption in favor of simpler implementing structures, but more complex programs will often be required to meet USAID's objective of equitable development and can be justified on this basis. 1This section is based on material presented in two volumes prepared by Cornell University with USAID support: Easman, Milton J., and Norman T. Uphoff 1982 Local Organizations and Rural Development The State of the Art. Rural Development Committee Center for International Studies Cornell University. Uphoff, Norman T., and Milton J. Esman 1974 Local Organization for Rural Development Analysis of Asian Experience. Rural Development Committee, Cornell University. [return to text] 2For a much expanded treatment of this point, see: Ralston, Lenore, James Anderson, and Elizabeth Colson 1981 Voluntary Efforts in Decentralized Management. Institute of International Studies, University of California, Berkeley. [return to text] 3Actually the difference between "formal" and "informal" organizations may often be one of degree; similarly, many apparently "indigenous" organizations may be of relatively recent origin, i.e., only one or two generations old. The typology offered here for descriptive purpposes should not be allowed to disguise the more complex dynamic reality. [return to text] 4For more detailed information see: Cernea, Michael 1981 Modernization and Development Potential of Traditional Grass Roots Peasant Organizations. In: Directions of Change: Modernization Theory, Research, and Realities, edited by Attir ed al. Westview Press. Boulder, Colorado. [return to text] 5Much of the following discussion of linkages is based on material presented in: Leonard, David, and Dale Rogers Marshall (eds.) 1982 Institutions of Rural Development for the Poor. Institute of International Studies, University of California, Berkeley. [return to text]

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