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. Let’s 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 People’s 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 (women’s 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!