Table Of ContentISBN 978-1-349-13573-8
9 781349 135738
THE MACMILLAN SERIES OF ILO STUDIES
Published titles include:
Iftikhar Ahmed (editor)
BIOTECHNOLOGY: A Hope or aThreat?
Alain deJanvry, Samir Radwan, Elisabeth Sadouletand ErikThorbecke(editor,f)
STATE, MARKETAND CIVIL ORGANIZATIONS:NewTheories,NewPractices
and their Implications for Rural Development
ValiJamal and John Weeks
AFRICA MISUNDERSTOOD,OR WHATEVER HAPPENEDTOTHE RURAL
URBANGAP?
JefTrey James and Susumu Watanabe(editor.f)
TECHNOLOGY, INSTITUTIONS AND GOVERNMENT POLICIES
A.S.Oberai
POPULATIONGROWTH, EMPLOYMENTAND POVERTYINTHIRD-WORLD
MEGA-CITIES
Susumu Watanabe(editor)
MICROELECTRONICS ANDTHIRD-WORLD INDUSTRIES
A.B.Zahlan
ACQUIRINGTECHNOLOGICALCAPACITY
The Il.O's World Employment Programme (WEP) aims to assist and
encourage member States to adopt and implement active policies and
projects designed to promote full, productive and freely chosen
employment and to reduce poverty. Through its action-oriented
research, technical advisory services, national projects, and the work
of its regional employment teams in Africa, Asia, and Latin America,
the WEP pays special attention to the longer-term development
problems of rural areas where the vast majority of poor and under
employed people still live, and the rapidly growing urban informal
sector.
At the sametime,inresponse to the economiccrisesand the growth in
open unemployment of the 1980s, the WEP has entered into an
ongoing dialogue with the social partners and other international
agencies on the social dimensions of adjustment, and is devoting a
major part ofits policyanalysis and advice to achieving greater equity
in structural adjustment programmes. Employment and poverty
monitoring, direct employment creation and income generation for
vulnerable groups, linkages between macroeconomic and microeco
nomic interventions, technological change, and labour market
problems and policiesare among the areas covered.
Through theseoverallactivities, the fLO has beenable to help national
decision-makers to reshape their policies and plans with the aim of
eradicating mass poverty and promoting productive employment.
This publication is the outcome ofa WEP project.
State, Market and Civil
Organizations
New Theories, New Practices and their
Implications for Rural Development
Edited by
Alain de Janvry
Professor ofAgriculturaland Resource Economics
University ofCalifornia at Berkeley
Samir Radwan
Director, Development and Technical CooperationDepartment
International Labour Office, Geneva
Elisabeth Sadoulet
Professor ofAgriculturaland Resource Economics
University ofCalifornia at Berkeley
and
Erik Thorbecke
H.E. Babcock Professor ofEconomicsandFoodEconomics,CornellUniversity
A study preparedfor the International Labour Office within
theframework ofthe World Employment Programme
palgrave
macmi llan
© International Labour Organization 1995
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ISBN978-1-349-13573-8 ISBN978-1-349-13571-4(eBook)
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Contents
List ofFigures vii
List ofTables viii
Preface ix
Acknowledgements xii
Notes on the Contributors xiii
State, Market and Civil Organizations: New Theories,
New Practices and their Implications for Rural
Development
Alain de Janvry, Elisabeth Sadoulet and Erik Thorbecke
2 Markets and States:Against Minimalism and Dichotomy 20
Paul Streeten
3 Political Constraints on the Developmental State:
Alternative Theoretical Explanations 54
Elisabeth Sadoulet
4 The Rocky Road to Reform:Trade, Industrial, Financial
and Agricultural Strategies 86
Lance Taylor
5 Political Economy ofStructural Adjustment: A General
Equilibrium-Interest Group Perspective 112
Terry Roe
6 Impact ofStateand Civil Institutions on the Operation of
Rural Market and Non-Market Configurations 139
Erik Thorbecke
7 Grassroots Organizations and NGOs in Rural
Development: Opportunities with Diminishing States and
Expanding Markets 168
Norman Uphoff
v
vi Contents
8 BetweenState, Markets and Households: A
Neo-Institutional Analysis of Local Organizations and
Institutions 202
Jeffrey B. Nugent
9 Analytics of the Institution ofInformal Cooperation in
Rural Development 220
Pranab Bardhan
10 CivilInstitutions and Evolution 233
KaushikBasu
11 The Rural Community, Mutal Assistance and Structural
Adjustment 251
MarcelFafchamps
12 The Role ofCollateral in Credit Contracts 278
Clive Bell
13 Land Reform as Commenced Business: The Evidence
Against Stopping 306
MichaelLipton
14 Institutions and Economic Linkages at Vi11age Level in
West Java, Indonesia 351
Irma AdelmanandKatherine Ralston
15 The Political Economy ofEconomicDecline and Reform
in Africa: The Role ofthe State, Markets and Civil
Institutions 388
DavidE. SahnandAlexander Sarris
16 Market, State and Civil Organizations in Latin America
Beyond the Debt Crisis: The Context for Rural
Development 426
AlaindeJanvryandElisabethSadoulet
17 State-Market-Civil Institutions: The Case ofEastern
Europe and the Soviet Republics 458
Gordon RausserandStanley Johnson
Name Index 487
Subject Index 504
List of Figures
4.1 A three-gap model 90
7.1 Levels for decision-making and activity for
development 171
7.2 Institutions and organizations as overlapping sets 185
9.1 (a) Prisoner's dilemma game
(b) Chicken or hawk-and-dove game
(c) Assurance game 222
11.1 Simulation results 271
12.1 The lender's optimum in the absence ofmoral hazard 291
12.2& The lender's optimum in the presence of moral
12.3 hazard: both the incentive and the reservation
constraints bind 293
16.1 Stabilization policies, Latin America 432-3
16.2 Indirect and direct price distortions, Latin America 442-3
17.1 Effects of civil liberties reform 464
vii
List of Tables
3.1 State's objective function in political economy models 58
4.1 Developing country trade, investment and savings
flows 88
7.1 Alternative approaches to rural development 174
7.2 Alternative principles oforganization and behaviour 177
7.3 Continuum oftypes oflocal institutions, by sector 179
7.4 Examples ofinstitutional channels and roles for
decisions-making and action, by sector and level 182
7.5 Contrastingexamples ofinstitutionsand organizations 184
8.1 Payoffs in a two-person symmetricprisoner's dilemma
game (i) 204
8.2 Payoffs ina two-person symmetricprisoner's dilemma
game (ii) 206
11.1 Simulation design 270
13.1 Land rights and land reform: paradigms and
definitions 316
13.2 Urban farm and rural non-farm labour: census data,
1974-85 342
14.1 Daily energy intake by household group 354
14.2 Villagedemographics 355
14.3 Consumption as a fraction ofown production 356
14.4 Sources of labour income by household group 358
14.5 Proportion of labour hired by household group 359
14.6 Average land owned, rented and controlled 360
14.7 Distribution ofland owned and farmed 361
14.8 Social accounting matrix outline 366
14.9 Household incomes by source 373
14.10 Market and government simulations (per cent change) 382
15.1 Public current and development expenditures as share
ofGDP 408
16.1 Latin America: stabilization and growth, 1980-89 428
viii
Preface
This volume presents the results ofa fruitful cooperation between the
International Labour Office, Cornell University and the University of
California at Berkeley. The papers were presented at a Conference
which took place in December 1991 at Cornell University.As the title
suggests, the main objectiveofthe Conferencewas to addressa central
question:whatare the implicationsfor rural developmentofthe major
changes in development theory as wellas in development strategies in
the world, particularly the shift from a state-sponsored to a market
oriented approach? The different papers attempted to answer this
question, drawing on different disciplines and looking at different
aspects. The result is a rich debate and equally rich insights into this
problem.
TheILO was particularlyhonoured tosharein thisendeavour,given
its history in support ofrural development since its inception in 1919.
This history reflects, to a large extent, the evolution ofthought in the
field ofrural development in general.
Seen from a historical perspective, the fLO's work in the area of
rural development has evolved in four broad stages: (a) Standard
setting almost immediately after the establishment of the Office. This
concerned primarily organized agriculture, especially plantation
workers. (b) Support to institution buildingwhere the focus was on
the creation ofcooperatives and other institutions to help agricultural
production. This phasecoincided with the shift ofemphasisin the ILO
from standards to what was called 'services', (c) Employment and
poverty: during the 1970s, and mainly as a result of the Employment
Strategy Missions, the focus shifted towards the problems of under
employment and poverty in developing countries, which were mainly
concentrated in rural areas. The question then was why growth, that
was taking place at a rate generally higher than thatof population, did
not create sufficient remunerative jobs, neither did it succeed in
reducing poverty drastically. During this phase, the main determinant
ofrural povertywas thought to beland distribution,hencethe focuson
agrarian reform as a remedy, but perhaps ignoring the other equally
important determinants of poverty especially skill endowments and
access to technology and credit. (d) Structural adjustment and rural
ix
