Disintegration,
the reason
for policy failure – an analytical model of integrated
rural
development
By:
Gusztáv Nemes (Hungarian
Academy of Sciences – Institute of
Economics)
Chris High
(Open
University – Systems Department)
ESRS XXI Congress, WG8 –
Keszthely, 2005 August
Abstract
Our paper explores, on a
theoretical level,
the reason for frequent failures of rural development policies and
identifies
some potential improvements in rural policy making in
The situation and development problems of the rural areas
of Europe
is a very complex matter, since a large number of factors –
globalisation,
technical innovations, ‘natural’ socio-economic changes, etc. – has
strong
influence in the evolution of European rurality. Nevertheless,
observing the
history of EU policies one could say, that there has been a continuous
positive
intention to improve the situation. During the last decades a huge
amount of
money, human resources and political intentions, were pumped into the
maintenance and the development of
Why is it like this? What can be the fundamental problem, causing dysfunction in the development system, in spite of all effort and aid invested in the betterment of rural areas? How could we do better? Being rural sociologists, working with primarily qualitative methodology we believe that these types of questions do not have easy answers. Yet, we hope that through a new classification of rural disadvantages and a simple model of integrated and non-integrated rural development systems we can illuminate some of the most important reasons beyond the failure of European rural policies.
In their article Van der Ploeg et al (2000) suggest that
a new model
of rural development that emerges slowly but persistently in both
policy and
practice should be followed by a paradigm shift in associated theory.
They
suggest that “there is a need for a new rural development paradigm that
can
help clarify how new resource bases
are created, how the irrelevant is turned into a value and how, after
combining
with other resources, the newly emerging whole orientates to new needs,
perspectives and interests.” (2000:399). They state that, the new rural
development paradigm emerged as a set of responses to the old,
modernisation
paradigm - marking a clear divorce from the deterministic nature of the
old
order. Nevertheless, the new paradigm still has its roots in the past,
since
rural development is usually constructed on the back of existing
production
structures (Murdoch 2000). The new paradigm is first of all connected
to those
trends, which have been trying to solve problems arising from the
modernisation
paradigm that shaped the European rural economy and society in the post
War
period. Though it has also strong connections with cultural traditions
and
social networks that predate the recent modernisation period.
The literature[2] feeds a number of elements
into the ‘new paradigm’. The founding fathers of the endogenous
development
paradigm (Bassand et al. 1986) already
established most important elements – such as the importance of
endogenous
resources, their marketing, the control of the process, external
relations,
local participation and leadership, subsidiarity, integration of
economic
sectors, etc. (Brugger 1986, pp.47) – subsequent theories concentrating
on
various aspects of rural development all offer valuable contributions.
The
‘endogenous paradigm’, contradicting modernisation, put the main
emphasis on
the importance of participation, empowerment of local actors and
unlocking of
local resources. This was seen as the only way to protect rural values
and
enhance the rural economy at the same time (Shortall and Shucksmith
1998).
Nevertheless, when disregarding extra-local influences and
possibilities
(positive and/or negative), this approach may close whole areas into
low
trajectories and misses the chance to explain important developments
connected
to global processes (Lowe et al 1995) .
The theory of ‘rural districts’ (Marshall 1890 and 1927
cf. Fanfani
1994; Lowe et al 1995) is standing on a similar platform. However, it
emphasises the importance of long standing socio-economic networks and
a
certain institutional thickness, trying to explain the economic success
of
these areas and clarify how they can penetrate global markets with
their local
products. Nevertheless, this approach can only be applied in a very
limited
scope, since these practices are difficult to transfer from one place
to
another and successful rural districts are still exceptions, rather
than a rule
for much of European rurality (Cécora 1999). The ‘network
paradigm’, embracing
previous exogenous and endogenous approaches, offers ‘a third way’,
calling
attention to the connections between local and extra-local networks
(Lowe et al
1995, Amin & Thrift 1995; Cooke & Morgan 1993; Murdoch 2000).
It
explains rural development in the framework of innovation, learning and
external intervention; and understands it as a set of power relations,
‘who
holds control’, being the most important factor for local areas.
However, as
critic say, this approach is still too deeply rooted in the endogenous
paradigm, and offers little help for the most backward rural areas,
which,
lacking resources and/or human capacity, have hardly any chance to
develop
sufficient networks or to be ‘ahead of the game’ in any way (Murdoch
2000).
Multifunctionality and the ‘cultural economy approach’ offer different
routes
for rural development, subsequently seeing the way forward in the role
of
renewed agricultural production and connected activities (small scale
processing, the maintenance of environment, etc.) or in the marketing
of
socio-cultural traditions, through ethno/green tourism and locally
specific
production. Nevertheless, these alternatives should be understood as
complementary, rather than mutually exclusive possibilities for rural
development.
The formulation of the new rural development paradigm,
therefore,
benefits from existing practices and a range of theoretical
considerations. The
literature offers a number of definitions for rural development,
concentrating
on various aspects and considerations. However, there is a wide
agreement
amongst authors that the ‘new rural development paradigm’ is still
nascent
concept informed by contemporary procedures and practices; therefore,
we should
not rush into exclusive, generalising definitions. Van der Ploeg et al
(2000:396) believe that “the concept of rural development is above all
a
heuristic device. It represents a search for new futures and reflects
the drive
of the rural population. It goes beyond modernization theory where the
problems
of agriculture and the countryside were considered resolved. Definitive
answers, however, are missing and if offered should be mistrusted.
Rural
development theory is not about the world as it is, it is about the way
agriculture and the countryside might be
reconfigured.”
Nevertheless, we would like to offer here a working
definition. It
does not intend to be a final or an exclusive one, but tries to give a
broad
framework for this study and to indicate our approach to rural
development,
agriculture, EU policies and connected matters. The definition of what
we call
‘integrated rural development’ is as follows:
Integrated rural development is an ongoing process
involving outside
intervention and local aspirations; aiming to attain the betterment of
groups
of people living in rural areas and to sustain and improve rural
values;
through the redistribution of central resources, reducing comparative
disadvantages for competition and finding new ways to reinforce and
utilise
rural resources. It is integrated in the
sense that
- as opposed to central development - it is controlled and managed
locally; but
– opposed to local development – besides local resources it also leans
on the
professional and financial support of the centre. In other words, integrated
rural development could be called the theory of the ‘new rural
development paradigm’
which tries to identify how local development and/or the
reconfiguration of
rural resources can be helped by the centre; for the benefit of rural
localities; at the same time maintaining rural values for the future.
‘Integrated rural development systems’, in
this understanding, are particular setups of central and local
institutions
(such as: administration, knowledge, information and decision-making
systems,
social networks), working in coherence and so being able to realise the
ideas
of integrated rural development theory.
Rural areas need protection
because, resulting from a different development trajectory, they have
serious
comparative disadvantages in the context of growing global market
competition.
One of the main aims of rural development is clearly to eliminate or
overcome
these comparative disadvantages, to ensure fair competition and social
and
economic cohesion between different areas. The current 'comparative
disadvantages' originate from two different sources[3]:
·
one
is
underdevelopment of different infrastructures, resulting in limited
communication of people, products, money and information; we will call
these access-type disadvantages;
·
the
other is the
limited ability and resources to produce goods and services, saleable
on the
global market; we will call these resource-type
disadvantages.
Access-type
disadvantages are usually
visible and quantifiable results of uneven development, based on
imperfect
resources. They limit different types of access to, and from,
peripheral areas,
namely: physical; economic; and political (or policy) access.
The most obvious example is
bad physical access, due to poor
physical infrastructure (roads, telecommunications, amenities, etc.),
which
sets strong constraints on the movement of people, goods and
information,
limiting 'physical access'. For example the lack of good roads limits:
the
possibility of commuting from a peripheral area into a nearby
industrial
centre, the transport of goods produced or the number of tourists
attracted. On
the other hand, it also limits the attractiveness of an area for
industrial
inward investment. The lack of so-called soft infrastructure (such as:
business
and financial services; educational institutions; or health services)
is less
visible, but causes similar results. It limits the movement of money
(investment) and businesses, again, into and out of these areas,
constraining economic access. For example, the lack
of local banks and personal connections to them limits entrepreneurs to
access
financial resources and the banks access to their potential customers.
Large
outside investors usually use their central facilities for financial
services,
often even build their own training centres, but the lack of these
services can
easily become an obstacle for smaller investors. The third type of
deficiency
is due to the shortage of public and civic institutions, such as:
public
administration; organised interest groups; various agencies and
umbrella
organisations for civil societies; development associations; and often
even
representation of political parties. The lack of these hinders policy access, or the ability of central
organisations to reach the peripheral areas to enforce regulations or
to offer
resources for development. Without a functioning local administration
it is
impossible to maintain even basic services, or to distribute government
benefits to those in need. Without working civil society it is
difficult to
know what people of a certain locality wish for their future. The
consequence
of all of these deficiencies is limited
access, resulting in limited communication (of capital, goods,
people,
information and policies) into and from the peripheral areas. This
causes the
exclusion of these areas from mainstream economic, political and
cultural life
and maintains their underdeveloped status.
Resource-type
disadvantages of rural
areas are the result of their long-term economic and political
dependency on
urban centres, their unfavourable economic structure and/or
geographical
location and their limited access to goods, information and central
resources.
These disadvantages limit the ability of rural areas to produce goods
and
services saleable on the global market and they could be classified as
low financial, human, and institutional
resources.
The most obvious example of
a resource-type disadvantage is the lack of financial
resources. In peripheral areas, businesses, people and even local
authorities are poorer and have limited capacity. Capital accumulation
(if
there is any) is slow in primary production, the risk is very high and
there
are often other factors limiting the ability of entrepreneurs and local
authorities to find capital for investment[4]. The
scarcity of different types of infrastructure can also be
understood as a resource-type disadvantage, if it sets constraints on
local
production and the development of businesses[5]. Another
group of disadvantages arises from the weakness of human
resources. Rural areas are often
sparsely populated, providing less manpower and purchasing power than
urban
ones. Apart from numbers, the make-up of the population can also be an
impediment with a high proportion of poorly educated, ageing residents
and, in
the CEECs at least, disadvantaged ethnic minorities. As a result of
severe out-migration,
whole generations can be absent in certain rural localities and those
who left
were usually the most educated and resourceful young members of the
community.
As a result of weak human resources and long-term economic and
political
dependency, there is often a weak culture of entrepreneurship and
community
resources can be on a low level. In general, there is a lower capacity
for
innovation and learning than in urban areas[6]. Institutional resources, or
a certain thickness of local institutions (formal and informal),
(argued by
Amin and Thrift (1994) and others) can also be absent. Moreover, in
those areas
where human resources are the most eroded, even a culture of mutual
trust and
willingness to co-operate can be missing, making it difficult to
initiate or
carry out any sort of development. The shortage of public and civil
institutions, also mentioned as an access-type disadvantage, inhibits
the
ability of backward areas to recognise and efficiently express their
needs and
to attract aid and financial resources[7]. These resource-type
disadvantages would disable rural areas in global competition, even
if they
have appropriate access to the markets.
Amongst the core EU
policies, promoting the cohesion of underdeveloped areas, measures
aimed at
access-type disadvantages predominate. Resource development and
empowerment of
backward areas have always remained marginal targets in the policy
arena.
However, access is a two-way concept. Isolation can be very damaging
for a
locality, but it provides some protection against global competition.
Suddenly
removing this protection without reinforcing the local economy can
cause
serious further damage. Access, therefore, might be a necessary, but is
certainly not a sufficient condition for the development of backward
rural
areas. Promoting the reinforcement and utilisation of local resources
from
central sources is difficult and problematic but critical for rural
development
and a lack of such resources may result in policy failures.
The following sections
intend to clarify various elements of the above definition, such as:
what we understand
on centre and periphery, central and local development systems, how we
differentiate
between rural disadvantages and how they can be tackled through
different
strategies. Then we outline simple models of non-integrated and
integrated
rural development systems suggesting that through the latter one
integrated
rural development might be achieved.
Rural
development
marginality is usually understood in geographical terms and is often
synonymous
with peripherality or remoteness. In this sense, it has long been
recognized
that people living in rural areas have suffered problems of physical
exclusion
from urban-based services and jobs (Lowe et. al. 1995). Nevertheless,
for rural
development 'centre' and ‘periphery’ can be seen in a number of dimensions. For
this study,
besides the geographic interpretation, we also consider economic and
political
understandings as follows:
The
'economic centre' for this study
consists of large European economic players,
such as: particular
The
'political centre' for
this study is the
'political building of the European Union'. This 'building' is not easy
to
capture, since the political power of the EU is spread between
different
political, juridical and bureaucratic institutions (such as the
European
Council, the Parliament, the European Court of Justice and the
Commission) and
financial institutions (such as the European Investment Bank) of the
EU. The EU
as a political centre is said to be largely influenced by the most
powerful
Member States; by the 'euro giants' and large international
organisations (WTO,
NATO e.g.) (Amin and Thrift 1994, Korten 1996, Tucker 1999).
Nevertheless, the
EU is a political entity, having its own traditions, rules and
procedures and
bureaucratic power and a growing influence in many areas of economic,
social
and political life throughout
The 'geographical centre' for
this study is
a highly urbanised geographical area, with a dense network of cities,
industrial and service centres, extremely well developed infrastructure
(of all
sorts); rich human and institutional resources and networks. According
to
Eurostat 'peripherality index' (European Commission 2002) the central
area of
The
three
aspects of the centre, described
here, complement and reinforce each other in a
number of different ways. Some of these are obvious, such as the
highest degree
of economic and political power (e.g. headquarters, political
institutions).
These are concentrated in central geographic locations, leading to
far-reaching
consequences for the development of these regions. Others are more
obscure,
such as the ways economic power is converted into political influence
and vice
versa[10].
Europeanisation
is about opening up political, economic, geographic and social space.
This is
being carried out through the reduction of a wide range of traditional
protection mechanisms of these spaces. The process serves the interests
of the economic centre, the market, international
capital and multinational companies. Nationally or regionally specific
rules
and regulations currently represent obstacles for the free movement of
people,
goods and capital. Business needs to have access
to local and regional economies. To achieve this, generally accepted
regulations and policies, to ensure the necessary conditions
(stability, proper
relations, common technical standards, etc.), are needed. The European
Union,
the political centre of
Europeanisation,
therefore, exposes peripheries to growing global competition. As a
result of
being on a different development trajectory, rural areas usually have a
weak
starting position and a low level of control during the process and
thus have a
comparative disadvantage. Consequently, they can easily lose much of
their
remaining resources that can jeopardise their future development
possibilities[11].
At the same time this could also endanger the existence of those
ecological,
cultural and community values, which have been maintained in rural
areas. This
would entail a significant loss for the whole society and it is this
which
provides moral and democratic legitimisation for rural development. The
resultant social, economic and environmental problems in rural areas
can have a
knock on effect on urban areas which provides additional
political-economic
legitimisation for rural development. Therefore, in parallel with the
ongoing
process of Europeanisation, intervention is needed to avoid or lessen
its
negative effects on peripheral regions. This intervention is usually
called rural
development by policy makers and it is done through: setting new
rules for
protection (replacing traditional domestic protection mechanisms);
redistribution of resources through aid, agricultural subsidies and
development
policies; and providing assistance for local actors to unlock local
resources.
On
the other
hand, rural development can also be seen as not an outside
intervention,
but the aspiration of local people living in rural areas for taking the
challenge themselves and improving their life circumstances and their
immediate
environment. According to Van der Ploeg et. al. (2000:395) “rural
development
is reconstructing the eroded economic base of both the rural economy
and the
farm enterprise… (and) represents the well understood self-interest of
increasing sections of European farming (rural) population.” This aspiration is embodied in the work of
individuals, private businesses, local institutions of public
administration
and political parties, and various forms of civil society. Local
actors,
seeking more influence and better results (and/or to fulfil the
requirements of
external aid for development), often form development associations and
partnerships. They try to achieve these aims through both unlocking
local resources
and attracting external ones (aid, public investment, direct private
investment). This type of rural development is a ‘heuristic device,
which
“represents a search for new futures and reflects the drive of the
rural
population” (2000:396).
Along
these
lines two types of complementary rural development systems could be
distinguished, existing in parallel, though often being in conflict
with each
other. They carry significant and characteristic differences concerning
their
aims, actors, motivations, constraints, resources and overarching
logic.
One
type could
be called the central administrative system of rural
development,
based on fundamentally top-down interventions of the political centre.
It
comprises such elements as: European and domestic policies; centrally
redistributed resources; institutional networks; skills, technical and
procedural knowledge of various level bureaucrats; strategic
development plans;
central rules and regulations; representation of high level interest
groups and
NGOs, etc. It has a formalised and institutionalised character.
It
is based on written rules, established procedures and controlled by
bureaucratic institutions. It uses external resources for intervention,
usually
works with a very narrow flow of information, with high transaction
costs and
aims at quantifiable results. At the same time it can have a large
scope and
embrace higher level or long term strategic objectives, which are above
short
term economic rationality[12].
It is dependent on and driven by the modernist technological regime,
and a
central development logic[13]
- in other words by the ruling policy paradigm. The central system
contains
various levels, including EU or domestic level, but depending on its
size and
the kind of intervention, the regional level can also belong to here.
Vast
majority of EU and domestic rural policies belong to this system. Its
overarching aim is to serve the interests of the centre, providing
access to local economies and creating a
reasonably balanced and 'peaceful' environment for economic
development.
The
other type
could be called the local heuristic system of
rural
development, based on essentially endogenous, bottom-up processes. It
comprises
such elements as: local economic, political and social actors; local
development plans; social networks and kinship relations; local
authorities,
innovative individuals, development associations and partnerships as
well as
the development skills and experiences of these local actors. Although
it
builds upon local resources, rural values and synergistic effects of
multiple
activities, it often needs external finance and encouragement
(financial
resources, technical assistance, mediation, expert knowledge, etc.). It
is
usually based on deep and responsive knowledge to local matters, very
wide
information flows, and an often loose network of public sector and
civilian
organisations of a certain locality. Institutionalisation and
formalisation is
usually low. This type of development tries to give flexible responses
for
internal and external challenges and possibilities in order to protect
and
improve local life and values, keeping benefits mainly for the
locality. The
resulting local development systems, in compliance with varied
circumstances,
can be very diverse or specific and difficult to transfer to other
localities.
The geographic level for this type of development varies according to
local
circumstances, though the sub-regional and other ‘more local’ levels
below that
seem to be the most appropriate. The overall logic of the local
development
system is rooted in the ‘new rural development paradigm’[14]
(see examples earlier in this study).
Concerning
human
actors of the two systems, additional important differences can be
pointed out.
Dynamic actors of local rural development systems, such as leaders of
rural
development associations, organisers of local co-operatives or private
entrepreneurs, work for the betterment of their immediate environment.
Their
work often has a very direct effect on the lives of themselves and
their
friends, neighbours, families. Therefore, due to their local
embeddedness, they
are under the moral control of their own community. Beside public money
and
aid, they usually risk their own savings and other resources as well.
They
usually have deep, insightful background knowledge and a continuous
flow of
information about their area, but often cannot deal with the
bureaucratic rules
of central policies. They are often very committed and have strong
views on the
future. This might mean less objectivity and can make them prone to
mistakes
during the development process[15],
but it also keeps them going and preserves their faith in times of
decline or
problems. In certain respects, they have a short timescale on the one
hand,
since they have to produce results quickly, to convince others to join,
and
encourage the outside world to support their ideas. In other respects
they
operate to a very long timescale, since they stay where they are and
'have a
whole life to spend there'. The main concern of their work is to attain
the
betterment of rural life and reach results often of a non-quantifiable
nature.
Actors
designing, administering and controlling central policies (politicians,
bureaucrats, public servants) come from a very different perspective.
They have
to deal with other people's lives and ideas, which usually have no
effect on
their own. They are high up in the system, seeing a broader picture,
similarities, differences, successes achieved and mistakes committed
elsewhere.
As a result, they can take a more objective perspective which considers
long
term or indirect objectives. They are far from the field, have very
limited
knowledge and information about certain localities and never have
enough time
or resources to process and understand even the data they have
gathered. They are
under administrative and political control, deciding about public
money, having
imperfect information and resources for this, and a failure may put
their
career at risk. At the same time they have power and control by
themselves,
hence one of their main concerns can be risk avoidance, shifting the
responsibility on to somebody else (officials lower in the hierarchy or
the
beneficiaries) if possible. They have an insightful knowledge of the
bureaucratic structure, are used to strict rules and administrative
procedures
but also are the best placed to know how to ‘interpret’ them. They are
often
constrained by political commitments and other considerations, not
recognised
by outside observers. The main concern of their work is to fulfil the
will of
the political centre, achieving measurable results, designing and
implementing
policies in a transparent and accountable way, taking as few risks as
possible.
Summing
up it
could be said that there are deep philosophical disparities between the
two
systems, or in other words they work according to significantly
different
development logics. One is rooted in the modernist tradition, the other
in the
new rural development paradigm, one works with a central, the other
with a
local development logic. As a result, the two systems (and their
contributing
actors) often cannot fully understand each other and it is hard to find
good
examples of long term, dynamic, balanced co-operation between them.
Nevertheless, in reality any development process has to incorporate
elements of
both logics to have a chance to be successful. For example: central
aims, such
as the cohesion of different areas through structural development, are
usually
initiated by powerful central actors (e.g. the EU Commission), although
the
consideration of local interests and possible local effects, as well as
the
participation of local actors, is usually required for success. At the
same
time, a local development initiative, started by locals and aimed at
their own
environment usually needs some sort of technical or financial
assistance
(provided by the 'centre') to be able to take off, or at least needs
broadly to
comply with central regulations and strategies for the future.
According
to our
initial definition of integrated rural development, The aims of rural
development can be achieved through: the reduction
of comparative disadvantages for competition and the finding
of new ways to reinforce and utilise rural resources. Access- and
resource-
type disadvantages, (discussed above) are not independent. They are
interconnected and often reinforce each other, multiplying negative
effects in
certain regions. Although they are
difficult to separate, they should be tackled on different levels,
through
different approaches, institutions and procedures. The following
section will
explore how different rural disadvantages can be faced through the two
identified development systems.
Traditional
development policies, determined by ‘the modernist technological
regime’,
recognise access-type disadvantages
as the main cause of backwardness, as well as social and economic
problems.
According to this approach, through improved access, structural
backwardness can be mitigated and peripheral
areas can be connected to the circulation of economic life. The market,
supposedly, will do the 'rest of the job'. This is good for the
periphery since it brings in
external capital and other resources (information, expertise, etc.),
thereby
revitalising the local economy. It is also good for the
centre, since it opens up new space, markets, natural and human
resources and supports the continuous growth of the global economy.
Such an
approach can be based on the following principles:
·
development
can
best be achieved through large financial investments and by building
infrastructure, agencies and administration;
·
it
should be
based on programming, have large scope in terms of time and
geographical space,
and consider higher or longer term objectives (such as environmental
goals or
the cohesion of different areas);
·
resources
should
be concentrated; this presumably brings better results, and also means
large
projects, which can be administered, controlled and evaluated by the
central
institutions all the way - enabling transparency and accountability of
public
spending;
·
development
resources should be additional to private and (domestic) public money,
helping
projects that could not be realised otherwise (this, again, often means
expensive, large projects, such as building of motorways);
·
during
the
development process, policies should consider and be continuously
informed by
local interests, effects and reactions.
All
this
corresponds well with what was said about the central
administrative system of
rural development[16].
The main target for this approach is the lack of physical access and
infrastructure, understood as one of the most important causes of
structural
backwardness. The deep involvement of the central system in this seems
to be rational,
since it would be impossible to carry out large infrastructural
developments
(roads, communication lines, sewage systems, etc.) without central
control,
strategic planning and large external investments. This is also in line
with
modernisation and globalisation tendencies, economic growth and the
usual
bureaucratic and political requirements for spending large sums of
public
money. Nevertheless, if only some types of access are improved - namely
the
physical infrastructure, which is the easiest to plan, control,
legitimise and
carry out from a central perspective – it can lead to uneven
development and
the reinforcement of structural inequality.
Tackling
other access-type
disadvantages, however, is less straightforward for the central
system.
Creating soft infrastructure for economic access (financial and market
support
institutions, vertical and horizontal integrations, all sorts of
services,
training, etc.), for example, requires less money and engineering work,
but
more organisation, connections, local knowledge and social engineering
in
general. In a free market economy, local level institutions for market,
education and services can be financially supported by the centre, but
it is
usually better that they be organised and maintained locally. Policy
access is
a similar case. Local authorities and various units of lower level
public
administration must be financially supported and often have strong
political
connections with the centre. Nevertheless, in democratic states they
usually
have a high level of local autonomy too. This is even more applicable
to other
local institutions, such as NGOs, civil societies, development
associations and
other local or regional partnerships. They also need financial support
from the
centre; however, their political, financial and organisational
independence is
crucial for freedom and democracy.
In
other words,
to successfully improve access to (and from) backward rural areas,
local level
institutions should be deeply embedded in local economy and society.
They should
be based on insightful knowledge of local circumstances and should give
flexible, innovative responses to external and internal challenges,
which
assumes diversity, small scale and networking with a high level of
independence. All this is difficult to achieve through conventional
formalised
institutions, top-down procedures and tight bureaucratic control of the
central
administrative development system. These types of institutions
correspond
better with bottom-up processes and the local system of rural
development.
Of course, it does not mean that central resources (money, expertise,
coordination, strategic planning, etc.) are not needed, but rather
that, some
of them should be channelled through the local development system. This
reduces
transaction costs, targets resources more effectively to those places
where
they are the most needed. On the other hand, if these institutions are
deeply
embedded in local economy and society, they are more likely to improve
access
both ways, for the benefit of the locality as well[17].
Additionally, besides creating policy access, local institutions are
essential
for unlocking local resources too, and therefore, their development
also helps
to tackle resource-type disadvantages.
Improving
access
does not necessarily favour the local economy and society nor helps to
sustain
rural values and improve life circumstances. If the local economy is
not
reinforced at the same time as the opening and if it cannot protect
itself in
the field of global competition, then improved access can take away as
many or
even more resources than it brings to the area (Douthwaite 1998). The
results
of asymmetric patterns of resource allocation and of diverse
development
trajectories cannot be eliminated simply by providing access and space
for competition.
This would be similar to setting up a race between a horse-drawn
carriage and a
modern racing car[18].
If local resources are inadequate or unprepared for the production of
marketable goods and services, then the locality would not have
anything to sell
on the market and would lose out on the business. Improved transport
and
communication links can accelerate the loss of labour and local
markets,
squeezing out local businesses and reinforcing out-migration.
To
be able to
take an active part in 'the game', the ability of backward areas to
produce
marketable goods and services has to be improved. In other words, resource-type disadvantages have to be
tackled as well. we argue that without advanced local level systems
of
rural development and a hospitable environment, created by the central
system,
resource-type disadvantages cannot be faced efficiently.
Improving
the
productive capacity of a certain region can be based on two basic
strategies:
relying on external resources, by attracting aid and direct private
investment;
or on internal resources, by unlocking them through local development.
However,
at the end of the day, every development is based on the utilisation or
unlocking of some sorts of internal resources. Even large industrial
foreign
direct investment (FDI), as a classical example of exogenous
development,
chooses a particular location for new plants to utilise certain local
possibilities. They can be attracted by geographical location, cheap
and/or
skilled labour, natural resources, cheap space or looser control and
regulations, for example. They can also be induced by regional
development
policies, offering special taxation or financial assistance for those,
investing in a certain geographic area. All these can be understood as
internal
resources, particular to an area. However, the way in which FDIs unlock
them is
very specific. It involves large financial investment, advanced
knowledge,
world-wide networks, and creates huge value added.
Nevertheless,
there
are certain characteristics of large external or induced investments,
which
often prove to be disadvantageous for the well-being of the localities
involved
(Cécora 1999). Large external investments in a relatively poor
environment,
changing everything overnight, can cause a shock to the local economy
and
society. What is called the “creaming” of regional resources by
Stöhr (1986),
they might use only a very limited part of the local resources (for
example
cheap labour, or space) creating over dependent, one-sided local
economies.
Whole regions can become dependent on one firm or industry, which
carries the
danger of total collapse in case of bankruptcy or relocation of
investments[19].
Alternatively, a firm can remain completely alien from its environment,
offering
little help to the local economy, but creating huge obstacles to any
alternative forms of development[20].
Competition for local resources and markets between external investors
and
local entrepreneurs is another important issue, limiting local
development
possibilities[21].
Decisions about large private (and public) investments are made far
away, with
small (or no relevance) to local interests, such as employment, income
levels,
accessibility of services and the protection of local (rural) values.
If investments
have to comply only with laws and central regulations (which mainly
support
central interests), there are no effective safeguards for the
betterment of
local people, or the protection of rural values.
However,
if the
local development system is well advanced, then a region or a certain
locality
is less exposed to the dangers, carried by large external investments.
If a
region has a well thought out, widely known and agreed development
strategy, it
is easier to decide if a certain investment is likely to bring
benefits, or
simply intends to exploit particular resources for profit - leaving
environmental and social problems behind. If an area has advanced local
development institutions and democratic procedures, it is easier to
make
legitimate decisions, and, should the occasion rise, to bargain and
make a
better deal with investors. It is also easier to find alternative
possibilities
(external and internal) for development or to stop an ongoing project,
if
necessary, to safeguard local values. External investment is neither
good nor
bad for rural development necessarily. If well prepared and controlled,
it can
be a boon to the local economy and society - providing jobs, supporting
business networks, feeding into local infrastructural investment and
improving
the well-being of the whole community. The critical distinction for
rural
development and the 'betterment' of an area is: whether the bulk of the
value
is created/captured locally or externally; how sustainable is the
unlocking and
use of local resources; and who controls the whole process. To achieve
a good
position in this game, besides central rules, rural areas need extra,
‘tailor
made’ protection, which might best be offered by their local-heuristic
development system.
Compared
to FDI,
local development initiatives unlock internal development capacity in a
very
different way. Having far less money and usually no advanced technical
knowledge or international networks, they have to work with what they
have:
local knowledge, skills and traditions; primary production; natural
environmental beauty and social networks. They have to unlock local
resources –
in other words have to reconfigure rural values as development
resources – to
be able to compete on the market. According to Stöhr (1986)
endogenous
initiatives aim at diversified multisectoral development standing on
“more than
one leg” (p. 70.). These rural development practices include a wide
variety of
new activities such as the production of high quality and
region-specific
products, farming economically, nature conservation and landscape
management,
agri-tourism and the development of short supply chains. They can be
characterised by pluriactivity, multidimensionality, multifunctionality
and a
high degree of integration. Creating cohesion between farms and other
rural
businesses is also a crucial factor, and the simultaneous take up of
different
rural development activities may well provide some clues to how
potential
impacts can be enlarged by triggering synergy mechanisms. Rural
development practices
often require a difficult and complex reconfiguration of farm
activities, new
skills and knowledge or the creation of new networks.
Local
economic
development initiatives can bring about very different benefits and
have to
face different problems than external investments. It is usually based
on or
aimed at a high degree of local-regional identity (Stöhr 1986).
The scale of
the development and of economic and social change is usually smaller,
therefore
it does not bring a shock to the locality. The change can be organic,
built
mostly on endogenous knowledge and resources, unlocking local
development
potential. Farms and other rural businesses, when diversifying their
activities, can make gradual changes, based mainly on the
reconfiguration of
rural values and their existing resources (buildings, skills, land,
etc.) and
on their family labour, rather than significant financial investments.
This
type of development does not create economic dependency and cannot be
disrupted
by outside forces through cutting the flow of external resources or
simply
relocating the investment somewhere else. Nevertheless, as it is shown
in the
literature there are many difficulties in reinforcing the economy
through local
development. As a result of economic and social degradation, resources
are
often simply inadequate or difficult and costly to unlock or utilise.
Remoteness and lack of infrastructure restrict local development as
much as
external investment and the lack of local financial capital brings
further
difficulties. Nevertheless, the most difficult problems arise from the
deficiencies of the local development system: poor human resources, the
lack of
legitimate institutions, weaknesses of trust and entrepreneurial
culture.
Without these and other necessary factors like co-operation and
innovation,
successful local development is impossible to realise.
New
rural
development activities, therefore, assume both a well working local
development
system and appropriate interventions of the centre. As one of the most
important
elements, an environment hospitable for local economic projects is much
needed.
This includes a variety of factors, such as: appropriate rules,
regulations
(market, hygienic, animal welfare, etc.) and accessible legal services,
which
can help (but also hinder) the production and marketing of locally
specific
products; supporting state agencies (technical, financial); long term
development strategies; educational and training organisations. If
appropriate
information about local needs is available and respected, these factors
clearly
can be efficiently facilitated by – and hence can ultimately be part of
- the
central system of development. Nevertheless, other aspects of
hospitable
environment, such as advisory services; local business associations;
local
development plans or marketing strategies are more efficiently provided
by the
local system.
Direct
aid for
economic development, investments or the creation and maintenance of
jobs, for
example, is also needed. Nevertheless, significant financial resources
usually
are only available from the central administrative system, which is not
able to
(and does not intend to) deal with the diversity of self driven local
economic
development projects. Traditional production subsidies under the CAP or
domestic schemes could be mentioned as examples. After all, these can
be
considered as financial support for local economic development in the
agricultural sector. These are traditionally significant subsidies,
which are
channelled through the institutions and procedures of the central
development
system. According to this, strict bureaucratic control has to be
applied from
the top all the way to the beneficiaries. Therefore, variations,
different
circumstances and local innovations cannot be taken into account. The
money is
distributed normatively according to simple, quantifiable indicators
and
eligibility criteria. The result is that: there was probably no policy
in
recent history of the EU criticised more for being ineffective,
expensive, not
reaching the targeted social groups and bringing possibly more
socio-economic
and environmental damage than benefits for rural Europe than the CAP.
We
would like to
argue that: efficient redistribution of external aid and unlocking of
local
resources call equally for: a deep, insightful knowledge of local
circumstances. Building networks, achieving synergistic effects and
working out
innovative solutions require trust and mutual understanding amongst the
participants; and diversity, local variations, innovative solutions
should be
considered during the process. It is difficult to imagine achieving all
this
through formalised institutions and administrative procedures of the
central
development system. Advanced local systems of rural development seem to
be much
better suited for these purposes.
For
balanced
development of backward rural areas - ensuring parallel improvement of
various
access- and resource-type disadvantages - harmonic co-operation between
central
and local systems of development would be needed. If this is achieved
that
could be called an integrated system of rural development. Such
a system
might be able to solve the problem of ‘how to support local development
centrally’, and realise ideas of integrated rural development theory.
The
following section offers simple models to explore the connections
between the
integration of central and local development systems and the
effectiveness of
rural development policies, delivered by the system as a whole.
Integration
in
rural development can be discussed in various ways. Its most common
understanding concerns the integration of various economic sectors -
agriculture, industry, services. Another frequently mentioned aspect is
the
integration of those disadvantaged social groups in the development
process
(women, elderly people, national and ethnic minorities, etc.), which
could
suffer even more if left out of improvements. Nevertheless, now we
concentrate
only on the lack of integration of the two development systems: central
and
local. Building on the above discussed concepts, we intend to provide
simple
models of integrated and non-integrated rural development systems,
which could
give some explanation about the failure and success of rural
development
policies. The models at this stage can be understood as a vertical
slice of the
whole rural development system (including the central system and
one
(any) particular local system), thus it tries to explain the
process
from the perspective of a single rural locality.
Components
of
the model are derived from the previous analysis:
Central
Administrative System of Rural Development
–
characterised by top-down, exogenous interventions, high level of
institutionalisation, bureaucratic control, written rules and
procedures, the
modernist technological regime and quantifiable targets;
Central
Development Resources – financial
resources in the
central development budget, available for redistribution through the
central
system;
Local
Heuristic System of Rural Development –
characterised by bottom-up processes, heuristic aspiration of local
people to
improve their lives, flexible responses to challenges, social networks,
diversity, multifunctionality, and synergistic effects;
Local
Development Resources – rural values
(natural,
cultural, social), understood as resources, which often have to be
unlocked or
reconfigured if they are to be used for local economic development;
Access-type
Disadvantages – limiting access
(physical,
economic, policy) and the free movement of goods, people and capital to
and
from backward areas;
Resource-type
Disadvantages – (financial, human,
institutional)
limiting the ability of rural areas to produce goods and services
saleable on
the global market;
Result – the outcome of the development process: to a certain
extent
upgraded access and enhanced production capacity, resulting in either
more
balanced or biased environment for local economy and society.
The
direction
and thickness of arrows (1-8) represent the flow of resources
between different
components of the model; and the size of the circles indicates the
level of
institutionalisation (and advancement) of the local and central
development
systems.
Figure 1. The non-integrated
system of rural development
In
a non-integrated
system there is little or no co-operation between central and
local systems
of development. Control is kept in the centre and the local system is
underdeveloped and barely institutionalised. The vast majority of central
resources (1) are delivered by policies and institutions
of the central
system directly to the beneficiaries. Large amounts (2) are
invested
into tackling access-type disadvantages however; they aim
largely the
improvement of physical access. There are also large sums (3)
for local
economic development, however, mostly in the form of simple normative
payments
(production subsidies), which are ineffective and can carry significant
dysfunctions. Very few resources (4) are assigned to the
reinforcement
of local development institutions or to unlock latent local development
resources. The local system of rural development is weak,
hardly
institutionalised and does not have adequate resources to release local
development potentials (5). Thus, much of these remain
unexploited and
the added value (6) of local resources (or rural
values) remains
small. The contribution of the local system to the elimination of resource-type
disadvantages (7) is not likely to be significant. Non-physical
access,
backing the local economy and rural products to penetrate global
markets can
also expect little or no support (8). All these can lead to
unbalanced
development where, in a certain rural locality, access (especially
physical
access) improves much faster and further than production capacity. Here
we end
up in a vicious circle. If there is nothing to sell, then rural areas
cannot
withstand the competition brought by improved access, and finally most
values
that have been preserved by rurality are likely to be lost. In this
case, rural
development is not successful and central policies fail to fulfil their
role.
Figure 2. The integrated system
of rural development
In
an integrated
system, local and central development systems should work in a
dynamic
cooperation with each other. Control, resources and responsibilities
should be
dispersed throughout different levels of the system. The existence of
advanced
local development institutions is a necessary condition in this model. Redistributed
resources (1) are still channelled through the central system,
although their allocation is quite different. A significant share of
resources (2)
is still directly spent on tackling access type (mainly
physical)
disadvantages. However, those resources, allocated for supporting local
economic development directly from central sources (3) represent
a much
smaller share of the budget. They are still normative payments, but
rather
aiming at the maintenance of public goods (agri-environmental schemes,
for
example) than simply subsidising conventional agricultural production.
A
significant part of central resources (4) is devoted to the
reinforcement of the local development institutions and the unlocking
of local
resources. As a result, the local development system is well
advanced
and institutionalised. It is able to invest (5) in the
protection of
rural values and their utilisation in the development process. Like
this, local
resources can be exploited and can contribute with considerable
added value
to the development process (6). This value flows into the economic
resource
base of the local area (7), creating marketable products and
greatly
reducing resource-type disadvantages. At the same time, the
local
development system can also make a significant contribution against access-type
disadvantages (8), primarily improving business and policy access,
for the
benefit of the local area. All this can lead to a much more balanced
development. The production capacity of the locality is reinforced and
a two
way access (from as well as into the locality) is provided. Thus the
rural
area, utilising its resources and finding its segment of the market can
become
independent, keep its population and sustain its values for the future.
Three
main
differences can be highlighted between integrated and non-integrated
models.
One concerns the flow of resources, the second the flow of
information, and thirdly the level of advancement and/or
institutionalisation of local development systems.
The
difference
concerning resource-flows is quite obvious. In the
non-integrated model
the central system distributes the vast majority of the budget directly
through
its administrative institutions, applying strict bureaucratic control
and
simple indicators all the way down to the beneficiaries. The inevitable
result
is low effectiveness, since much of the money cannot reach those places
where
it is most needed. At the same time, lacking central financial
resources and
technical/political support, local systems are not reinforced and there
is
often insufficient capability to unlock local development resources, or
even to
absorb central aid. Consequently, the value added of the local system
to the
development process remains small.
In
an integrated
model, a significant part of the budget is not delivered directly by
central
policies, but channelled through the local development system. This
strengthens
this system and allows for the reinforcement of local institutions and
social
networks, etc. It can also directly provide financial aid for the
exploration
and exploitation of local resources for local economic development. All
this
can result in the rapid growth of local added value and the expansion
of
available development resources, for the development system as a whole.
By
including the
flow of information in the model, the differences of
effectiveness
between integrated and non-integrated development can be partly
explained.
Accurate and detailed information about problems and possibilities,
disadvantages and resources is the key starting point for any action in
rural
development. To explore the differences in information flows between
integrated
and non-integrated development, additional figures are needed, showing
not only
one slice (representing the viewpoint of one locality), but the system
as a
whole. In the non-integrated model (see Figure 3.), the central system,
through
institutions and bureaucratic procedures tries to supervise the whole
development process. For making
appropriate strategic and operational decisions about development,
information
has to be collected, processed and analysed centrally. For tackling
resource-type
or some non-physical-access-type disadvantages, masses of very diverse
information should be handled from a large number of rural localities.
Information would be needed not only about access- and resource-type
disadvantages, but also on many other aspects, such as conditions of
social
networks, local development institutions, condition of the local value
bases,
and so on. Moreover, taking this logic further, different level
institutions of
the central system should monitor and control each of the development
projects[22]
as well. This would involve huge diversity, large number of decisions
and huge
transaction costs, creating enormous difficulties for normal
bureaucratic
institutions. Possible (usual) solutions are: fighting mainly those
disadvantages, which are easier to grasp without detailed information
of a
qualitative nature (problems of physical access, for example);
supporting large
projects instead of small ones; or to give normative payments based on
simple
quantitative indicators and political decisions, rather than detailed,
quality
information. Nevertheless, all these result in low effectiveness,
significant
gaps in the development process and the exclusion of certain
activities, social
groups and geographic areas from central aid.
Figure 3. Information flows in
the non-integrated development system
In
an integrated
model (see Figure 4.), information is still needed, however, it is
collected,
processed and used on a much lower level, in the relevant local
development
system. Every single local system, belonging to a certain region or
rural
locality (institutions, social networks, businesses, etc.) deals only
with
information of its own area. In this way transaction costs can be kept
lower,
background information, innovative local solutions, tacit knowledge and
social
networks can be utilised and latent resources are easier to unlock.
Limited
central control can still be applied through regulations and the
allocation of
central resources. However, this allocation can be based on diverse,
qualitative
information, already processed by local development institutions.
Strategic and
operative decisions can be negotiated with local representatives, for
example
through integrated local development plans. By utilising diverse, high
quality
local information in a dynamic, iterative way, local development
initiatives
can create significant added value and generate synergistic effects,
thereby
making the use of central resources much more effective in the
development
process.
Figure
4.
Information flows in the integrated development system
Several
obstacles, hindering the dynamic integration of central and local
systems of
rural development can be identified in the above model. A more
philosophical
reason - arising from the differences in their basic logics, and
causing
frequent misunderstandings between them – was explored above. Another,
rather
practical reason originates from the absence or immaturity of local
development
systems. If there are neither established decision making procedures,
legitimate
leaders and representatives nor carefully planned local development
strategies
in the localities; if local development associations, public-private
partnerships, advisory services, paid development managers and
agencies, and
other local institutions are lacking; if social networks are
undeveloped; there
is no culture of entrepreneurship and innovation and human resources
are
insufficient in general - that seriously limits the possibility of both
local
development and central policies. Legitimate and formalised
institutions play a
key role here[23].
Paying local people to work for the common good can concentrate and
accumulate
human resources on local rural development tasks. These people then can
accurately collect and process information, making it available for
both
central and local use. They are also crucial for accessing central
development
resources. The central system, which is based on bureaucratic
institutions and
procedures, needs ‘something comparable’ to communicate with. Without
formalised institutions and representative bodies the local/sub
regional level
can neither negotiate with the central system nor access aid from the
‘rural
development budget’. Institutions are also necessary for accountable
and
transparent spending of financial aid. Consequently one could say that,
an
integrated system can only work if the local development system reached
a
certain level of institutionalisation, which is the third
important
difference between the two models described above.
A fundamental difficulty for integrated rural development can be identified here. The most appropriate levels for local rural development – sub-regional and below – often have few historic roots and weak public, civil and business institutions. Especially in the most backward areas, these have to be newly created or largely developed to be able to fulfil central requirements. For the centre, it is not easy to find ways to support this process, for several reasons. First of all, central aid, according to the rules, is tied to accountability and complicated bureaucratic procedures. This often proves an impossible condition for newly emerging rural development networks. On the other hand, for organic development, aiming at structural changes, local institutions should progress through bottom-up, participative processes, which cannot be driven or closely controlled from outside. Once the local development system has fully operational, advanced institutions, they can translate and mediate; they can help to access central resources for local economic development; explore and defend local interests; or can offer both, information and a channel for the central system to provide technical and financial aid. Nevertheless, local development systems with their institutions can already be considered as ‘process type results’ of previous rural development themselves. Therefore, it is very difficult to find an entry point in this cycle and to initiate the process. Surely, it should be a gradual process, involving many compromises and a combination of local and central efforts. Nevertheless, we would like to argue that reflexive intermediary agents, translating and mediating between central and local systems, could be of a great help in this process.
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[1]
The paper is based on previous research (PhD and post-doctoral), done
between
1998-2005, and was supported by the following donors: Phare ACE
Fellowship –
CRE -
[2] A
much more comprehensive review of the literature see in Nemes 2005/2.
[3] In
fact, they both originate from being on a different development
trajectory,
experiencing slower social and economic change, having weak
representation in political
decision-making and gradually losing natural, economic and human
resources to
the benefit of the 'centre'. However, the two areas of disadvantage,
described
here, represent different type of problems and need different
approaches and
solutions.
[4] In
[5]
The lack of roads between villages, for example, limits local
communication,
the development of social networks, co-operation and businesses.
Missing
amenities and tourism infrastructure (hotels, B&Bs, restaurants,
craft shops)
makes it impossible to encourage tourism potential. The lack of banks,
financial and advisory services or just a local post and other offices
in an
area makes the running of any business more costly and time consuming.
[6]
Nevertheless, in other cases innovation and flexibility, co-operation
and
learning are the main factors for flourishing rural economies.
[7] In
the world of bidding and competitive applications for almost every
available
resource it is crucial to have local partnerships and a well
functioning local
development organisation, preferably with a somewhat charismatic
leader. To
reach positive results it is also essential to have at least a degree
of
consensus about the main direction and areas of local development.
[8]
Some rural economies of
[9]
However, counterurbanisation, rural renaissance and not in the least
international networks of rural regions, developed or encouraged by EU
policies
have brought significant changes in this issue. Rural regions of
[10] It is often difficult to capture, how economic
corporations or
powerful Member States do actually influence political decision making.
To
reach their aims, these actors do not only use their political
representation.
Most of their influence is reached through lobbying, holding back or
distributing information or affecting public opinion through networks,
financial or political power.
[11] Newcomers or external investors can buy up houses, land
and other
means of production, depriving locals from the utilisation of these
assets in
local development in the future.
[12] The central system can give preference to environmental
protection
before economic growth, for example. As a result, agri-environmental
programmes
or ecological regeneration plans can be designed, which are costly, but
in the
long run improve the environment and the livelihood of the people at
the same
time.
[13] A technological regime is a more or less coherent set of
laws,
procedures, agendas, artefacts, knowledge, organizational patterns,
designs,
etc. that together structure technological development (Van der Ploeg
and
Renting 2000). According to the modernist regime, development was seen
in
concentration of economic power, exploiting economies of scale, and
creating
formalised institutions in an attempt for centralising decisions and
operations
(Brunori and Rossi 2000). In agricultural production, for example, the
main
targets were cost reduction, intensification and specialisation, which
resulted
in widespread monocultures on the European countryside. This process
could be
identified as one of the main components of what could be called the central
development logic.
[14] Opposed to centralisation and specialisation tendencies
in
modernism, new rural development activities go back to historic
traditions,
re-moulding the social and the material, based on diversity and
pluriactivity
to an extent, when researchers talk about ‘repeasantisation’ of the
European
countryside and agricultural production (Van der Ploeg et al. 2000).
This
process could be understood as one of the basic elements of a local
development logic.
[15] Such as: exclusion of those who they do not like or do
not agree
with; supporting and investing public and private resources into
unrealistic
ideas. These can cause legitimacy problems and can damage local economy
and
society.
[16] This model is followed by traditional top-down
development policies
of the EU. Typical examples could be the Cohesion and the Structural
Policies.
To improve the three different types of access there are even different
funds
set up, such as the Cohesion Funds to improve physical access, the
European
Regional Development Fund (ERDF) and the Guidance section of the
European Agricultural
Guarantee and Guidance Fund (EAGGF) to improve economic and business
access,
and the European Social Fund (ESF), to improve social, policy access.
[17] An example could be a local institution created to
support the
marketing of regional products on external markets.
[18] Just two examples: The IMF (International Monetary Fund)
has
recently admitted that taking the North and the South as broad
clusters, during
the last three decades there has been a divergence of per capita income
levels
between the two groups of countries. The number of low-income countries
in the
lowest quintile has actually risen from 52 in 1965 to 102 in 1995
(Tucker
1999). And a European example: According to EU experts, after fifteen
years of
Structural and Cohesion Policies, the gap between the Southern Member
States
and the rest of the EU has been reduced. However, regional disparities,
within
the Southern States have grown, significantly (European Commission
2002). In
practice, the central urban areas of the less developed states (which
always
have been better off) are developing rapidly, a consequence of
structural aid,
growing production and improved access to the global economy. At the
same time
backward rural regions do not benefit much from the development, but
are going into
even deeper decline and depopulation.
[19] If labour gets more expensive, environmental and welfare
regulation
stricter, or tax holidays end, firms, having no roots, local supply
networks or
need for skilled workforce, can (and often do) move forward to less
developed
areas. This is currently a strong trend in several Hungarian regions.
For a
comprehensive analysis of these and the following issues see Korten D.
C. When
Corporations Rule the World (1996) or Douthvaite, R. Short Circuit
(1996).
[20] A chemical, or a waste disposal plant, built in a rural
location,
employing few, highly qualified workers, can be a major obstacle for
the
development of rural businesses in the field of tourism, or
agricultural
production, for example.
[21] Retail business could be the most obvious example. Large
department
stores, built by international chains, often force small retailers out
of
business. Another, more unusual example: In a small rural area of the
Great
Hungarian Plain the National Park and the local development association
together planned to start an environmentally friendly, extensive cattle
business. An essential asset for this would have been the unused animal
breeding plant of the old co-operative. The plan was supported by all
important
local actors, however, at the auction, a large agricultural investor,
having
better resources and political connections, managed to buy the plant.
Today,
instead of the environmentally- and community friendly local solution,
there is
an intensive goose-feeding plant on the site, threatening the
environment and
limiting tourism potential.
[22] Looking at EU pre-accession policies, the PHARE
Programme works
this way most of the time, giving the right (and the burden) of
controlling
each project to the
[23] In the literature this is often referred to as a certain
‘institutional thickness’ (Amin and Thrift 1994).