Polycentric Organization: A Fundamental Requisite for Solving Urban Problems

1
Polycentric Organization A Fundamental Requisite
for Solving Urban Problems

• Elinor Ostrom
• Amos Sawyer
• Workshop in Political Theory
• and Policy Analysis
• Indiana University

2
What is the Puzzle?

• How to provide and produce local collective goods
  in urban areas of developing countries
  efficiently and equitably

3
What are Local Collective Goods?

• Local public goods
• Difficult to exclude beneficiaries
• Consumption is not subtractable
• Example Public safety
• Local common-pool resources
• Difficult to exclude beneficiaries
• Consumption is subtractable
• Example Water supply

4
What is the Challenge?

• Potential for free-riding due to difficulty of
  exclusion
• Potential for overuse due to subtractability
• Competitive markets fail to solve problems of
  free-riding and overuse of local collective goods

5
When Competitive Markets Fail, What Can Be Done?

• The Top-Down View create very large urban
  governments
• Basis for massive reforms of U.S. urban areas in
  20th century
• Basis for African post-independence urban
  development strategies
• The Polycentric View a system of large and
  small, public and private agencies perform more
  effectively
• Basis for recent U.S. reforms
• Basis for improving urban services in developing
  countries

6
Assumptions of theTop-Down View

• Collective goods are homogeneous
• Substantial economies of scale
• Urban voters have similar preferences
• Voting aggregates preferences well
• Elected officials command public bureaus to
  produce desired goods
• Bureau chiefs command street-level bureaucrats to
  deliver goods and services
• Street-level bureaucrats deliver services to
  passive clients

7
Additional Assumptions of the Top-Down View in
Developing Countries

• Government must control provision and production
  of public goods
• Regular citizens have limited capacities to solve
  problems of collective action
• People as subjects to be cared for by national
  government or claimants to demand public goods

8
Assumptions of Polycentric Theory

• Urban collective goods vary substantially in
  production and consumption characteristics
• Major economies of scale do exist for some goods,
  but not for all
• Road networks vs education or policing
• Coproduction essential to enhance production of
  education, police, and other services

9
Assumptions of Polycentricity (cont.)

• Urban voters have a wide diversity of preferences
  
• Individuals with similar, but evolving,
  preferences tend to cluster in neighborhoods
• Preferences within neighborhoods are more
  homogeneous than across neighborhoods

10
Assumptions of Polycentricity (cont.)

• Aggregating citizen preferences is always
  problematic
• Voting systems may produce unstable outcomes when
  preferences are heterogeneous
• Decisions within smaller jurisdictions related to
  neighborhood goods and services reduce
  heterogeneities
• Need face-to-face mechanisms to supplement voting

11
Assumptions of Polycentricity (cont.)

• Presence of many potential producers of local
  collective goods
• More information to citizens and public officials
• Provides an exit mode if voice is not sufficient
• Elements of competition enhance efficiency and
  innovation

12
Polycentric Assumptions Particularly Relevant to
Developing Countries

• Existence of other centers of authority in
  addition to national government
• National government cannot and should not strive
  to provide all public goods
• For many countries, constitutional-level reform
  required
• Individuals need to have legal standing
• local communities need to have limited
  constitutional authority

13
What are Public Economies?

• Collective consumption units (local governments,
  larger governmental units, neighborhood
  associations, other voluntary associations)
• Production units (governments as well as private
  organizations)
• Relationships between them
• Larger collective consumption units with smaller
  producers
• Smaller collective consumption units with larger
  producers
• Collective consumption units and provision units
  of the same size

14
Urban Public Economies in U.S.

• Police increased efficiency and better service
  to poor neighborhoods in urban areas with complex
  public economies
• Education smaller schools are more effective
  and efficient
• Coproduction of safety, education, health is
  greater in smaller units nested in a larger urban
  area

15
Lets Learn from Past Errors!

• Many citizens in the U.S. now receive lower
  performance from their reformed urban
  government than prior to the massive reforms
  based on unvalidated theory

16
Learning from Past Errors in Developing Countries

• Monocentric government most often turns predatory
• Rent-seeking is encouraged
• Predatory governments often become repressive

17
Learning From the Past(cont.)

• The monocentric developmental state is not the
  answer
• Benevolent government may provide many basic
  needs, but citizens/local communities may not be
  empowered
• Participation through national elections
  essential but inadequate as means of empowerment
• Not all forms of decentralization provide
  public goods equitably and efficiently and
  promote the empowerment of local people (local
  boss rule does occur)

18
Critical Considerations When Providing Public
Goods

• Nature of goods strongly affect performance of
  institutional arrangements for provision and
  production of goods
• Biophysical and social conditions of community
  need to be considered in crafting institutional
  arrangements
• Rules to be effective must be agreed and known
  (these may or may not be the same as rules on the
  books)

19
Essential Principles that Shape Successful Urban
Collective Action

• Established boundaries
• Cost/benefit proportionality
• Participation in collective choices
• Monitoring
• Graduated sanctions
• Conflict-resolution mechanisms
• Some autonomy at local level
• Rules governing nested relationships with central
  government and external authorities

20
Providing Public Goods in Urban Areas Examples
from Developing Countries

• Shack/Slum Dwellers Federation of India
• Solidarity and Urban Poor Federation of Cambodia
• Community-based organizations in Mexico City (San
  Miguel Teotongo, Cananea, Sierra Nevada)
• Homeless Peoples Federation of Philippines

21
Providing Public Goods in Local Communities
Examples from Africa (Niger Delta, Nigeria)

• Gbogbara Development Association (Rivers State)
• BunuTai Community Associations
• Gio-Kpoghor and Ogu Communities Association
• Ilaje Development Association

22
Gbogbara Development Association (Rivers State,
Nigeria)

• Community of about 20,000
• Provided pipe borne water project through CBO
• Goal of establishing 100 mono pumps over 10 year
  period (1994-2004)
• Completed 55 by 1999
• Community contributed 85 per cent funding
• Local government contributed 15 per cent
• Maternity home project
• Local women organizations initiated as 3 year
  project
• Project cost N5 million
• Community raised 63 per cent funding (with
  largest contributions from women, youth)
• Local government contribution of 37 per cent
  funding

23
Bunu Tai Community Development Associations

• Association of 5 community development
  associations (embracing population of 25,000)
• Undertook bridge construction project as 4 year
  project (connecting communities to fishing ports
  and farm settlements)
• Raised N12 million
• 92 per cent contributed by communities
• 8 per cent by local government

24
Gio-Kpoghor and Ogu Communities

• 2 Communities of 12,000
• Commercial center of Tai local government but
  without market stalls and shed
• Completed first phase of community market project
  over 3 years (1998-2000) at N5 million
• Communities contributed 89 per cent
• Local government 11 per cent

25
Ilaje Development Association (Ondo State)

• Ilaje a war ravaged community
• Form Gwama Cooperative Society to lead post
  conflict reconstruction
• Post-conflict reconstruction activities include
• Scholarship program
• Micro-credit to youthful fishermen
• Established mass transport business

26
Common Features of Projects

• Strong participation of community-based
  collective action units (womens organizations,
  youth, etc.)
• Nested within area-based development associations
• Collaboration with local government area

27
Critical Challenges of Urban/Local Governance in
Developing Countries

• Developing/strengthening local capabilities
• Ending predatory/dependent relationships with
  central government
• Avoiding dependence on donor assistance as an
  alternative
• Connect voice and exit with payment of local
  taxes
• Avoiding boss rule at local level

28
How Can Challenge of Predation Be Addressed?

• Deepen sense of shared community and sense of
  shared ownership (bonding relationships)
• Establish horizontal linkages (especially
  complementary networks)
• Establish vertical linkages
• Establish linkages with elements in central
  bureaucracies and supportive national and
  external actors

29
Developing-Country Researchers Need to Write the
Textbooks

• Young students need to learn about the
  capabilities that people devise to make their
  lives more productive
• Too many textbooks stress only the role of
  national officials and elections
• The valuable research reported on at this meeting
  needs to get into the curriculum of schools
  around the world!