Files
Abstract
Since the beginning of the 1990s a new rural development policy, which has later
been called the "new rural paradigm" by the OECD, has received increasing attention
in the European Union (EU) and elsewhere. It is expected that these policy
measures attenuate social and economic problems in rural areas on a broader basis
than the agricultural sector alone. They support local stakeholders like non-governmental
organizations, local governments and local businesses in implementing local
development strategies that are based on endogenous potentials and spatial interaction.
Polish rural inhabitants, suffering among many other issues, from a lack of nonagricultural
jobs, an unfavorable business environment and an insufficient public
infrastructure, pinned high hopes on those new measures. However, it is not proven
whether those measures of the new rural paradigm will stimulate the economic and
social development of Polish rural areas. So far, their impact on the local development
processes was mostly analyzed empirically, and those studies were strongly
dictated by guidelines of legislative bodies. Studies with theoretical reflections
can rarely be found. This study aims at elaborating an analytical framework for
rural development policy analysis that provides a basic understanding of governmental
action in rural development processes as well as allowings a normative
evaluation of rural development policy measures. This analytical framework could
further be used to empirically analyze the impact of those policy measures on the
development of Polish rural areas.
Central to this analysis is the perception of rural development problems as a consequence
of a lacking provision of local public goods. Local conditions, like a well
constructed public infrastructure, a favorable local business environment, a high
level of human capital, or a local landscape in sound conditions, can be defined
as local public goods as they are characterized by a low rivalry in consumption and
non-excludability. Local public goods, however, although they benefit all inhabitants
of a region, are often poorly provided or even remain absent. This study
hypothesizes that precisely the latter deficiency is tackled by policy measures of
the new rural paradigm. It is argued that those policy measures aim at facilitating
the implementation of local institutional arrangements that provide inhabitants
of a region with certain local public goods.
In order to understand the effects of measures of the new rural paradigm, the lacking
provision of local public goods was analyzed theoretically and empirically. Theoretically,
the lacking provision of public goods was discussed by means of three different theories. Welfare economics, the first theory presented, understands
market prices as the only mechanism coordinating individual interaction. Hence,
once market prices fail to reveal the scarcity of a good, like in the case of public
goods, market failure comes to the fore and can only be cured by governmental intervention.
But institutions like trust, reciprocity and property rights, which coordinate
individual interaction, find no place in the welfare economics scheme. However,
rural development measures of the new paradigm strongly focus on the implementation
of formal and informal institutions, which coordinate individual efforts in rural
development processes. The property rights theory, the second theory discussed,
approves the coordination capacity of institutions as it refers to the interaction problems
inherent in problems of public goods provision. Institutions channel individual
behavior and enable therefore the provision of local public goods. For the evaluation
of institutions the property rights theory proposes the offset of costs and benefits
that are borne/gained by individuals within different institutions which, however, is
inconsistent with normative individualism. Constitutional economics theory, the
third theory presented, by distinguishing between rules and moves, avoids the flaws
of the latter theories and proposes to evaluate institutions with respect to their approval
by all individuals involved in a public good problem since only consensus
guarantees that no individual will be worse off after implementing the institution.
But factual consensus on institutions, which should coordinate the provision of
local public goods in rural areas, seems to be unfeasible and to be combined with
high decision making costs.
Because of the latter fact the normative institutional economics theory was presented,
which introduces the social dilemma as a heuristic to apply the consensus
criterion to all kinds of institutions in everyday life. A social dilemma describes a
situation in which, because of unresolved coordination problems, actors of a group
do not make full use of their opportunities. That is, they do not exploit all gains
from cooperation. The social dilemma enables to analyze public good problems in a
positive and normative manner. Positively, individuals’ behavior channeled by
certain institutions can be analyzed. The normative analysis asks whether institutions
can be modified by way of institutional reform so that individuals, involved in
a public good problem, will jointly contribute to the public good provision, and
gains from cooperation will be exploited. In consequence, institutions which channel
inhabitants’ behavior in order to jointly provide a certain public good, find general
agreement. And policy measures, which facilitate the implementation of those institutions,
will therefore also find general agreement.
This leads to the questions of how institutional arrangements have to be composed
to facilitate the provision of public goods in rural areas. Three governance structures,
the market approach, government regulation, and community management
were presented, which all cover unique elements that facilitate individuals’ cooperation,
so that a joint provision of local public goods can be realized. Whether the implementation of institutional arrangements, capable of providing
local public goods in Polish rural areas, is facilitated by policy measures of the
new rural paradigm was analyzed within three case studies conducted in southeastern
and north-western Poland. The case study regions were all endowed with
local partnerships that reflect the idea of the new rural paradigm as they consist
of cooperation among local government members, local businesses and local
NGOs. The case studies comprise 104 guideline interviews with local government
members, members of local NGOs, local entrepreneurs, farmers and local
inhabitants in general. Guideline interviews were also completed by participant
observation and a small standardized questionnaire.
In the early 1990s, in all three case study regions particular local public goods
were not provided due to interaction problems that hampered individuals from a
joint contribution. By means of the social dilemma heuristic, the public good
problems in the case study regions were analyzed positively and normatively.
The positive analysis focused on the institutions that formerly hampered inhabitants
from a joint contribution. Then, for regions where certain local public goods
were successfully provided, the institutional arrangements, facilitating the successful
provision, were investigated and the impact of market-based relations, government
regulation and community relations on public good problems was analyzed.
In the normative analysis, institutional arrangements were assessed as preferable
only if exchange in terms of a successful joint provision of local public goods
was realized and mutual gains from cooperation were exploited. Finally, if policy
measures of the new rural paradigm facilitate institutional arrangements capable
of coordinating individual interaction so that inhabitants contribute jointly to the
provision of certain public goods, they were assessed as preferable.
It turned out that the foundation of local partnerships facilitated the implementation
of institutional arrangements, which induced inhabitants to jointly contribute to
the provision of certain local public goods. And those institutional arrangements
comprise elements of all three governance structures. But there were governance
structures which seem to be more suitable to overcome certain barriers, hampering
a joint provision of local public goods, than others. For instance, in cases where
a lack of trust among inhabitants hampered individuals’ cooperation, community
governance has shown advantages over the two other governance structures.
With respect to local partnerships’ access to public funds the implementation of
market competition among partnerships for funds, enabled a more efficient use,
while the access to public funds in general often enabled inhabitants to overcome
free-riding problems that were related to a joint funding of projects.
Furthermore, in all three case studies the success resulted among other things from
the following factors: a) local provenance of main initiators; b) the existence of
local leader personalities; c) the elaboration of a common local development
strategy; d) a close cooperation between the local development partnership and the local government; and e) the availability of a permanent staff taking care of
operational tasks.
Finally, the empirical analysis has shown that within policy measures of the new
rural paradigm, governmental action rather acts as a facilitator of public goods provision
than as a subsidizer of rural economic sectors. The latter measures stimulate
the socio-economic development as they facilitate the implementation of institutional
arrangements, consisting of elements of three governance structures that
are capable of providing local public goods successfully. In this case, the institutional
arrangements induce all inhabitants involved in a local public good problem
to contribute to the provision of the good as they enable inhabitants only to improve
their individual benefits through contribution. However, a joint contribution constitutes
the exploitation of gains from cooperation and visualizes the agreement of
all involved inhabitants in a public good problem on the institutional arrangement
that enables the joint contribution. Thus, consensus among inhabitants involved
is a normative criterion that should be taken into consideration when evaluating
development measures of the new rural paradigm.