Polycentric Organization: A Fundamental Requisite for Solving Urban Problems

Elinor Ostrom Amos Sawyer

Workshop in Political Theoryand Policy Analysis

Indiana University

What is the Puzzle?

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

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

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

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

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

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

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

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

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

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

Polycentric Assumptions Particularly Relevant to Developing CountriesExistence 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

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

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

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

Learning from Past Errors in Developing Countries

Monocentric government most often turns predatory Rent-seeking is encouraged

Predatory governments often become repressive

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)

Critical Considerations When Providing Public GoodsNature 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)

Essential Principles that Shape Successful Urban Collective Action Established boundariesCost/benefit proportionalityParticipation in collective choices MonitoringGraduated sanctionsConflict-resolution mechanismsSome autonomy at local level Rules governing nested

relationships with central government and external authorities

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

Providing Public Goods in Local Communities: Examples from Africa (Niger Delta, Nigeria) Gbogbara Development

Association (Rivers State)BunuTai Community

AssociationsGio-Kpoghor and Ogu

Communities AssociationIlaje Development

Association

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

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 million92 per cent contributed by

communities8 per cent by local government

Gio-Kpoghor and Ogu Communities

2 Communities of 12,000Commercial 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

Ilaje Development Association (Ondo State)

Ilaje a war ravaged communityForm Gwama Cooperative

Society to lead post conflict reconstruction

Post-conflict reconstruction activities include: Scholarship program Micro-credit to youthful fishermen Established mass transport

business

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

Critical Challenges of Urban/Local Governance in Developing CountriesDeveloping/strengthening local

capabilitiesEnding 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

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

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!