social fabric matrix as analytical tool to study eu banana regime and banana industry in st vincent

8/9/2019 Social Fabric Matrix as Analytical Tool to Study EU Banana Regime and Banana Industry in St Vincent

http://slidepdf.com/reader/full/social-fabric-matrix-as-analytical-tool-to-study-eu-banana-regime-and-banana 1/28

THE SOCIAL FABRIC MATRIX(SFM) AS AN ANALYTICAL TOOL FOR

EXAMINING THE IMPACT OF THE EU’S BANANA REGIME AND THE

RECENT WTO BANANA RULING ON THE BANANA INDUSTRY IN ST

VINCENT 1992-20001

Ashley R Cain

The Social Fabric Matrix (SFM) was developed by Gregory Hayden in 1982 as a way of

operationalising the perspective inherent in the institutional economics paradigm for the purposes of

describing a system and providing the database for planning and evaluation. The SFM makes it

possible to describe a system, articulate knowledge gaps in the system for future research, evaluate

policies, opportunities, and crises within the system and create a database for future monitoring. An

economic / production system such as the banana industry in St Vincent and the Grenadines is

influenced by cultural values, societal beliefs, personal attitudes, social institutions, technology and

natural environmental variables. A SFM analysis makes it possible to study the impact of the EU

Banana regime (1992) and the recent WTO banana ruling on the interactions of these variables in

the banana industry and economy of St Vincent and the Grenadines. In this paper I look at the

theoretical foundations of the SFM. I describe the methodological approach to constructing such a

matrix. I outline the analytical possibilities of the SFM and I illustrate the power of the tool byexamining factors influencing the nature and extent of the EU’s support to the banana industry in

St Vincent from 1992-2000. Finally I discuss how a tool such as the SFM can be used to examine

other economic issues.

INTRODUCTION

Since 1992, changes in the European Union’s (EU) banana regime have triggered many

changes in the structure and performance of the banana industry in St Vincent and the

Grenadines. The policy prescriptions of the banana regime are driven primarily by

neoclassical economic assumptions and measures of efficiency, competitiveness and

gains from trade. It is necessary to study the impact of these changes on the banana

industry and economy of St. Vincent and the Grenadines. An institutional economics

perspective provides an appropriate framework from which to assess the impact of these

changes. The Social Fabric Matrix (SFM) developed by Gregory F Hayden in 1982 is

one tool arising from this perspective which makes it possible to study the impact of

these changes in a holistic and integrated way.

1 Paper presented at the 23rd Caribbean Agricultural Economics Conference Nassau Bahamas 15-18

November 2000

1



The SFM is a relatively unknown analytical tool which can help policy analysts and

economists and others interested in the banana problem and similar issues understand

them better and design adaptive strategies.

As we consider alternative paradigms at this conference it is useful to present the SFM as

another tool in the intellectual toolbox used to generate solutions to the problems

presented by global trading arrangements such as the WTO and the EU banana regime.

In this paper I look at the theoretical foundations of the SFM. I describe the

methodological approach to constructing such a matrix. I outline the analytical

possibilities of the SFM and I illustrate the power of the tool by examining factors

influencing the nature and extent of the EU’s support to the banana industry in St

Vincent from 1992-2000. Finally I discuss how a tool such as the SFM can be used to

examine other economic issues.

Cain (1993) attempted to apply the social fabric matrix (SFM) developed by Hayden

(1982a, 1982b) to a study of the national agricultural research system (NARS) of St.

Vincent and the Grenadines. The SFM is primarily a systems - based framework

developed within the institutional economics paradigm that may help to enhance

understanding of institutional issues. Although other systems-based approaches have

been applied to the study of NARS (see Echeverria 1990), this was the first attempt to

apply the SFM as an analytical framework for the study of a NARS.

2



THE SOCIAL FABRIC MATRIX CONCEPT

THEORETICAL FOUNDATIONS

The SFM was developed by Hayden as a way of operationalising the perspective inherent

in the institutionalist paradigm for the purposes of describing a system and providing the

database for planning and evaluation. Hayden (1982a) claims that the SFM makes it

possible to describe a system, articulate knowledge gaps in the system for future research,

evaluate policies, opportunities and crises within the system and create a database for

future monitoring. If this claim is true then the SFM is potentially useful for examining

the structure and performance of a system as complex as the integration of a banana

industry into a global economic system. The SFM requires that one considers the impact

of seven types of components: cultural values, norms, societal beliefs, personal

attitudes, social institutions, technology and natural environmental variables on a system

(Hayden 1982 a, b, 1989). A proper understanding of these seven components is critical

for anyone wishing to use the SFM as an analytical tool. Let me therefore review some

key dimensions / definitions of these components

According to Hayden (1982b) culture is a collective systemic mental construct of the

superorganic and supernatural world. Culture is provided by tradition, not by the human

agent or social institutions. It is found in legends, myths, supernatural visions, folklore,

literature etc. Culture is mental whereas society is the set of socio-technical relationships

that direct behaviour patterns (1982b). Cultural values are the cultural criteria or

evaluative standards for judging what is ideal. Because they are transcendent, cultural

values are not amenable to change by the human agent or policy maker over a short

3



period of time. Cultural values are not goals or actions but are end-existence criteria by

which goals and actions are judged. Cultural values circumscribe the societal norms that

serve as criteria for institutional patterns.

Social values are institution and activity specific. They are the folk views used to explain

and justify social activities and institutional rules. Norms are the belief criteria used to

justify institutions. Each institution and activity will have a cluster of beliefs that a

specific to that activity or institution.

Institutions may be considered as “sets of rules of the game or codes of conduct that

serve to define social practices, assign roles to participants in these practices and guide

the interactions among occupants of these roles” (King 1997) Institutions are also

defined as rules or procedures that shape how people act and as roles or organizations

that have attained special status or legitimacy. Institutions may therefore be rule oriented

or role oriented. King describes institutions as constellation of rights, rules and

relationships that define social practice and guide interactions among those who

participate in them. Institutions have a stable, valued and recurrent nature. Regimes are

defined as social institutions composed of agreed upon principles, norms, rules and

decision making procedures that govern the interactions of actors in specific issue areas.

For a given institutional situation there exist obligations, permissions and prohibitions for

the element involved. The human element is socialised to respond to signs and symbols

in order to fulfill the duties and responsibilities of a situation. These responses are

4



attitudes. Beliefs and institutions therefore regulate attitudes to signs and symbols and

hence regulate behaviour. Attitude responses, for example, result in fields being

ploughed and experimental plots being tended. Through attitude theory the human actor

and human action are brought into social modeling. Institutional structures influence

attitudes by determining the stimulus situation to which a person is exposed, the response

options available, the level and type of motivation and by scheduling reinforcements

(McGuire 1985).

Technology is considered as the tools and skills necessary to operate these tools. Lower

(1987) describes technology as knowledge and technological development as a tool-

combination process. The existence and proliferation of tools is the underlying basis of

technological development. In a social setting technology adds rules and requirements to

social structure. Technology requires certain relationships, for example, land to labour

ratios. A given technology may also require that institutions provide specific tools and

knowledge.

The natural environment includes mainly elements of the flora, fauna, land and climate.

This view of the environment is much narrower than that articulated by Kast and

Rosenzweig (1974), who considered cultural, technological, legal, educational, political,

climatic, demographic, sociological, and economic factors as environmental variables.

Most of these variables are included in one way or another under one of the other

components of the SFM. Within the SFM the environment provides resources as well as

delivers constraints and requirements to institutions and technology.

5



THE GENERIC SOCIAL FABRIC MATRIX

The SFM, as outlined schematically in Figure 1, is based on the concepts of process and

delivery with components receiving from and delivering to each other. A process is

ongoing, a system has no end, and activities must be traced through the matrix to find

additional linkages and flows. Hayden, (1982a) describes the SFM as an integrated

process matrix designed to express the attributes of the parts as well as the integrated

process of the whole. The matrix is a non-equilibrium matrix, unlike the traditional

input-output matrix. Since a system does not have to be in equilibrium, equilibrium is

not imposed on the system studied. There is also no final demand, absolute requirement,

nor end to the system. Relationships in the matrix cannot be defined in terms of common

properties, so there is no common denominator by which the system can be evaluated.

Instead, such a matrix requires the use of multiple valuation criteria or measures. This

aspect of the SFM is important for selection and use of indicators to measure system

performance.

In the matrix the row components are delivering to the column components. The i-th row

is the same component as in the j-th column. For a given component one traces across

the column components to find out where deliveries are being made by the row

component. Some deliveries will be quantitative, other deliveries will be qualitative.

The deliveries indicated in the matrix are based on empirical research and observations of

the system. Some deliveries are flows, some are stocks and others are criteria. As

Hayden (1982a) explains, to have a flow of wheat the environment must provide a stock

of land and people must apply belief criteria to judge the appropriateness of production

6



Figure 1 Generic Social Fabric Matrix (after Hayden 1982a)

RECEIVING

DELIVERING

A . S O C I E T A L I N S T I T U T I O N

A 1 . K I N S H I P

A 2 . C O U R T S

A 3 . G O V E R N M E N T

A 4 . I N D U S T R Y 1

A 5 . I N D U S T R Y 2

A 6 . I N D U S T R Y 3

B . T E C H N O L O G Y

B 1 T O O L A N D S K I L L 1

B 2 T O O L A N D S K I L L 2

C . E N V I R O N M E N T

C . 1 F O R E S T

C . 2 . L A N D

D . N O R M S ( B E L I E F S )

D . 1 . W O R K E T H I C

D . 2 . P R O P E R T Y R I G H T

D . 3 . E G A L I T A R I A N I S M

E . V A L U E S

E . 1 . D O M I N A N C E O V E R N A T U R

E . 2 . F L O W I N G T I M E

E . 3 . D Y N A M I C I N D I V I D U A L I S M

A. SOCIETAL INSTITUTION

A1. KINSHIP

A2. COURTS

A3. GOVERNMENT

A4. INDUSTRY 1

A5. INDUSTRY 2

A6. INDUSTRY 3

B.TECHNOLOGY

B1 TOOL AND SKILL 1

B2 TOOL AND SKILL 2

C.ENVIRONMENT

C.1 FOREST

C.2. LAND

D. NORMS (BELIEFS)

D.1. WORK ETHIC

D.2. PROPERTY RIGHT

D.3. EGALITARIANISM

E. VALUES

E.1. DOMINANCE OVER NATURE

E.2. FLOWING TIME

E.3. DYNAMIC INDIVIDUALISM

7



technologies. This represents a descriptive use of the SFM. If one is interested in a

normative analysis then one can also use the SFM to postulate what flows should occur.

In the SFM, social structure is the system of myths, constraints and rules that guide social

and economic activities, legitimizes transactions and requires deliveries to be made

between system components. A social process is therefore a delivery pattern structured

by rules, beliefs and values. Components of the matrix are integrated and social

legitimacy criteria may be provided by systems of reciprocity, redistribution and market

exchange. For example, one industry may obtain deliveries from another by market

exchange, cartel arrangements (reciprocity) or government agreement (redistribution).

Each intersection of a column and row is a "cell". The information in a cell may include

types of deliveries, amounts delivered, the location of the delivery, and the time. If a

spreadsheet is used to store data for the SFM, each cell entry could contain relevant

information stored in several spreadsheet columns or an entire spreadsheet.

Standard matrix algebra cannot be applied to the SFM since the information in the rows

and columns are not of the same type. The number and kinds of components and entries

in the matrix will depend on the problem being studied and the investigator's interests.

Hayden used digraph theory and principles of Boolean algebra to develop the SFM.

Having specified the matrix it is then converted into a Boolean matrix. To create the

Boolean matrix each cell in which there is a transaction is labeled with a 1 and those with

8



no entry with a 0 or left empty as shown schematically in Figure 2. (Alternatively an X

may be placed in a cell as a way of graphically indicating deliveries/receipts between

system components).

In this generalized matrix, elements V1 to V5 are represented by a 1 if there is a linkage

between a row element Vi and a column element Vj, and by 0 otherwise (Harary,

Norman and Cartwright 1965). Directed graphs (digraphs), which indicate the pattern of

delivery or flow between elements of the matrix, can be prepared from the Boolean

matrix as shown in the lower portion of Figure 2.

Figure 2: Generic structure of a Boolean matrix and its associated digraph

V1 V2 V3 V4 V5 Row sum

V1 0 1 1 1 0 3

V2 0 0 0 0 0 0

V3 0 1 0 0 0 1

V4 0 0 1 0 0 1

V5 0 0 0 0 0 0

Column sum 0 2 2 1 0

GENERIC BOOLEAN MATRIX AND ASSOCIATED DIGRAPH

V 1

V 4

NODE

V 5

V2

V3

E D G E

I N D I C A T E S D E L I VE R Y B E T W E E N N O D E S

9



Each row or column element is considered a node, e.g. V4, whereas the actual delivery

linkage between element Vi and Vj is considered an edge (e.g. V3 and V4). Digraphs

therefore show the sequential nature of a system whose underlying structure can be

represented in a Boolean matrix.

The Boolean matrix may be manipulated to examine system sequence, centricity in the

matrix, network density, connectedness, reachability, and other kinds of system

comparisons (Harary, Norman and Cartwright 1965). Relationships outlined in digraphs

can also be analysed further to evaluate system structure.

OPERATIONALISING THE SFM

Methodology

The specific procedure used in operationalising the SFM is summarised below and shown

schematically in Figure 3. The research problem is first defined. It is important to

clearly define the problem being studied since the matrix can easily explode and become

unmanageable. Hayden (1993, Personal communication) advised that the SFM analysis

be restricted to the specific problem at hand and that the analyst constantly questions

whether the specific components included are truly relevant to the problem being studied.

He further suggested that, although a real-world system would include all seven possible

types of components, it is not necessary for an analyst to include all seven in a SFM

analysis.

10



A model of the system is then made, using a matrix. Relationships between components

of the matrix are indicated by placing an X or 1 in a cell where there is substantive flow

Figure 3 Methodology for developing the SFM

IDENTIFYPROBLEM

DETERMINE

IMPORTANT

COMPONENTS

PREPARE

SOCIAL FABRICMATRIX

B V I T E

B

VI

T

E

PREPARE

SUBMATRIX

E.G POLICY

PREPARE

SUBMATRIX

PREPARE

SUBMATRIX

PREPARE

DIGRAPHS

DO DETAILEDANALYSIS OF NODES

V

1

V

4V2

V

3

11



between components. The approach to model development may be based on actual

flows/ deliveries or hypothetical flows. If actual flows are used to determine the pattern

of deliveries between matrix components, then the appropriate research must be

undertaken to establish where linkages (deliveries and receipt patterns) exist.

Verification of linkages may be obtained from various sources such as project documents

and reports, financial statements, technical studies and analyses, legal instruments,

organizational guidelines and rules etc. If the matrix is used heuristically or in a

normative way then hypothesised flows are first postulated in the matrix then validated

through subsequent research efforts.

Once matrices are completed, digraphs showing linkages between components are

prepared to obtain a pictorial view or a holistic and cognitive map of the problem being

studied. A separate digraph may be prepared for each matrix studied. At the digraph

preparation stage of the analysis what actually flowed between components (e.g. money

or materials) may be written in along the edges of the digraph. Where the digraphs are

too complicated, with many edges and nodes the verbal description of deliveries between

components may be omitted from the digraph, in the interest of clarity. At the digraph

preparation stage of the SFM analysis, contextual validation of the SFM models derived

is undertaken to see if the flows are realistic and in line with known facts or theory.

Once the models are revised and validated then analysis can proceed in several directions.

One direction would be to use the matrix and digraphs as a basis for elaborate and

complex description of the system. A second direction would be to study specific system

12



characteristics such as system centricity, system vulnerability, and stability as well as

other network analyses. A third possible direction of study could be to use the matrices

and digraphs for policy analysis and the design of interventions or new institutional

arrangements.

The primarily descriptive phase of a SFM analysis ends with the preparation of digraphs

and updating of relevant databases based on the patterns of flows indicated by the

digraphs analysis.

It is at the post-digraph stage of a SFM analysis that policy analysis and evaluation of

system performance can be done. For example, if the delivery patterns between two

entities can be stored in a database as time-series observations then quantitative analyses

of the substantive flows between these entities could be done using regression analysis

and other econometric techniques. If instead the substantive flow is of a qualitative

nature, then appropriate qualitative analytical techniques could be used.

The pattern of system deliveries in a matrix would be evaluated against socially derived

primary and secondary criteria. One would therefore devise the measurement standards

against which system deliveries would be measured and make comparisons of the

normalized and actual system flows. If one were also interested in simulating the impact

of system changes, such as new delivery patterns that would arise because new

institutions require changes in system flows, one would revise the matrices and

associated digraphs to evaluate delivery patterns resulting from these new institutional

requirements.

13



Data handling in SFM analysis

Matrices and digraphs may be used to organize data collection for a SFM analysis.

Because of the potentially vast number of linkages that may be identified in a SFM

analysis, the database from which one can draw could be large and diverse and include

both qualitative and quantitative data.

Fortunately, modern computer spreadsheets and relational databases can help to make

handling easier and even a full-fledged SFM analysis is possible using computers. It is

also possible using computer programming techniques to create a relational database to

underlie the SFM (Hayden 1993, Personal communication, Warkentin and Menter 1982),

and to have digraphs generated automatically from the Boolean matrices derived from the

SFM

If appropriate software were available or developed then it also would be possible to use

the SFM interactively to do ex-ante study of changes to a system. By varying system

components and postulating different system flows and delivery patterns, an analyst

could trace alternative development scenarios for a system and evaluate the implications

of such flows for the performance of the system. One could therefore simulate different

institutional arrangements and consider how the constellations of resource flows, policies

and system outputs are likely to change. Further development of these possibilities of the

SFM may make it useful as a tool for designing social technologies such as new

institutions in developing countries.

14



THE SOCIAL FABRIC MATRIX APPLIED TO AN ANALYSIS OF

FACTORS INFLUENCING THE NATURE AND LEVEL OF EU

FINANCIAL SUPPORT TO THE BANANA INDUSTRY 1992-

2000.

As noted by Cargill 1999, there has been a philosophical shift in the purpose of EU

financial support for the banana industry in St Vincent since 1992. These shifts have

been allied to changes in institutional arrangements arising from the interactions of the

EU banana regime, the Lome agreement and more recently the WTO rules on

international trade. These institutional arrangements provided the EU with various

obligations and resulted in the use of various instruments to provide financial and other

support to the industry and to guide and facilitate restructuring within the industry. The

major elements and influences on the financial support given is provided in Figure 4.

Components Explained

The Beliefs and Values that drive the support schemes include :

•

Free trade is ideal,• Economic growth is desirable,

• Industry must be competitive, Institutions must be strengthened,

• Economic efficiency attained and

• Diversification of economic activities is essential

The relevant beliefs and values are gleaned from EC Council regulations (EC Regulation

2686/94 and 2320/96 ), goal statements, Government - EU Accords and other

agreements which establish the bases for the support given. Other matrix components are

similarly derived from an analysis of such sources.

The important institutions include distinct organisations such as Wibdeco, the European

Commission, and the Banana Growers Association. They also include decision making

15



Figure 4 Social Fabric Matrix of the major influences on the level and nature of EU Financial Support to the Banana industry in StVincent 1992-2000

F R E E T R A D E

E C O N O M I C G R O W T H

C O M P E T I T I V E N E S S

S T R E N G T H E N I N S T I T U T I O N S

E C O N O M I C E F F I C I E N C Y

D I V E R S I F I C A T I O N D E S I R A B L E

E U R O P E A N C O M M I S S I O N

S T V I N C E N T G O V E R N M E N T

W I B D E C O

F M O

N A T I O N A L A U T H O R I S I N G O F F I C E R

E D F P M C U

S T A B E X C O M M I T T E E

S V B G A

L O M E 1 V

W T O R U L E S

S T R A T E G Y P A P E R

C A S T R I E S A C C O R D

S F A

B A N A N A I N D U S T R Y T R U S T

S T A B E X T R A N S F E R S

C E R T I F I C A T I O N P R O G R A M M E

F R U I T Q U A L I T Y

I R R I G A T E D F A R M

N O N I R R I G A T E D F A R M

C O R E F A R M

D R O U G H T

H I L L Y T E R R A I N

W A T E R R E S O U R C E S

T O T A L

FREE TRADE X X X X X X X X 8

ECONOMIC GROWTH X X X X X X X X X 8

COMPETITIVENESS X X X X X X X X X 10

STRENGTHEN INSTITUTIONS X X X X 4

ECONOMIC EFFICIENCY X X X X X X X X X X X 12

DIVERSIFICATION DESIRABLE X 1

EUROPEAN COMMISSION X X X X X X X X X X X X X X X X 13

ST VINCENT GOVERNMENT X X X X X X X X X X X X X X X 13

WIBDECO X X X X X X X 7

FMO X X X X X X X X 8

NATIONAL AUTHORISING OFFICER X X X X X X X X X X 10

EDF PMCU X X X X X X X 7

STABEX COMMITTEE X X X X X 6

SVBGA X X X X X X X X X 11

LOME 1V X X X X X X 7

WTO RULES X X X X X X X 10

STRATEGY PAPER X X X X X X 7

CASTRIES ACCORD X X X X X X X 10

SFA X X X X X 6

BANANA INDUSTRY TRUST X X X X X X 4

STABEX TRANSFERS X X X X X X X X X X 10

TA TEAM X X X X X X X X X X 11

CERTIFICATION PROGRAMME X X X X X X X 6

FRUIT QUALITY X X X X X X X 8

IRRIGATED FARM X X X X 5

NON IRRIGATED FARM X X X X 4

CORE FARM X X 0DROUGHT X X X X 6

HILLY TERRAIN X X X X 5

WATER RESOURCES X 1

TOTAL 0 0 1 0 1 2 12 13 13 10 9 8 9 19 3 4 14 5 10 6 9 15 15 18 9 9 0 0 0 214

ENVIRONMENTVALUES AND BELIEFS INSTITUTIONS TECHNOLOGY

16



mechanisms such as the Stabex Committee and broad rules or procedural frameworks

such as the WTO and Lome IV agreements. The various institutions included in Figure

4 facilitate identification of needs and priorities, disbursement and management of

funds, implementation of agreed plans and monitoring of performance.

The technology variables associated with the EU’s support include those associated with

irrigated and non irrigated production as well as fruit quality improvements and

maintenance.

The critical environmental variables include drought, hilly terrain and available water

resources.

Analysis of Matrix elements

The various linkages and interactions between system components may be traced through

the matrix in Figure 4. It is assumed that a row component is delivering to a column

component. The precise nature of the delivery or influence can be determined from an

examination of documents detailing such transactions and flows. Some of the deliveries

are stocks such as land for irrigation, flows such as monies for various Stabex transfers,

others are criteria for decision making or disbursement procedures and project appraisal

guidelines.

The matrix shown in Figure 4 is complex indicating the numerous interacting influences

on the level of disbursement and the deliveries of EU financial support to the banana

industry. Most interactions are inter-institutional ones indicating the relative importance

17



of institutional components in determining priorities and actual deliveries. The relative

importance of the various components are indicated by the total deliveries and receipts

associated with each component. The Government of St Vincent, the European

Commission (including its functionaries at the EU delegation office in Barbados) and the

Banana Growers Association are major players in the process since financial transfers are

made on a Government to Government basis.

The Lome IV agreement, for example, set the legal basis for Stabex transfers, the

principles guiding the levels of transfers and the appropriate disbursement mechanisms.

It also established the need for both EU and recipient Government to develop and sign a

Framework of Mutual Obligations (FMO) governing the transfer of Stabex funds to the

recipient country. The FMO was therefore the instrument used to define the principles,

priorities and procedures for each annual allocation of Stabex funds from 1993-1995.

The FMO clearly spells out the amount of funds to be disbursed, the portfolio of projects

to be funded , the various responsibilities of Government, the EU and the various

agencies and persons involved in fund disbursement and use. It stipulates the role of the

Stabex Committee in overseeing programme implementation. It also defined the role of

the National Authorising Officer (NAO) in preparing and obtaining approval to disburse

funds to beneficiaries in the banana industry and economy. Because of space constraints

I limit my analysis / exposition of the methodology to selected aspects of the linkages,

deliveries and receipts identified in the SFM to illustrate its usefulness for studying

complex economic systems and arrangements.

18



As indicated by Cargill (1999), financial deliveries arising from Stabex transfers were

meant to compensate economic operators in the affected (banana) sector. A portfolio of

EU financed projects and initiatives have evolved since 1993. The first set of funds

were directed towards compensating economic operators in the affected sector. A

Banana Industry Development Programme (BIDP) was therefore funded from 1993

Stabex transfers.

The subsequent Stabex transfers for 1994 and 1995 were firstly aimed at improving

competitiveness within the banana industry then secondly at broadening the economic

base of the society. Most of Stabex 95 funds, for example, were programmed through the

1995 FMO for budgetary support and economic diversification activities in St Vincent.

This latter use of Stabex funds involved an almost unilateral broadening of the rules by

the EU outside what was prescribed by the Lome agreement. This broadening was

certainly influenced by the EU’s desire to streamline its economic cooperation

agreements with ACP countries arising from a deepening of the European integration

process and from the anticipated increased importance of WTO compatibility after the

conclusion of the Uruguay Round of Trade negotiations.

The Stabex 94 FMO stipulated six main areas in which the Stabex funds were to be

provided to St Vincent. These broad areas are summarized in Table 1 below.

19



Table 1: Summary of funds, allocated, approved and disbursed up to September 1999

from 1994 Stabex allocation to St Vincent (after Cargill 1999)

The EU deliveries under the FMO included personnel (including technical assistance

teams), finances , regulations, guidelines, obligations, sanctions and evaluation criteria.

Differences in interpretation of rules and perceptions of priorities between the

Government, SVBGA, and other national interest groups often led to slow release of

funds by the EU delegation in Barbados during the implementation phase of the Stabex

1994 FMO.

As shown in Table 1 there are some interesting relationships between the initial

indicative allocations in the 1994 FMO, the planned/programmed use of the funds and the

actual disbursement up to September 1999. Actual expenditures on the Banana

Productivity and quality components were quite high (57% of actual expenditure to date

and 30 % of planned expenditure). Expenditure on this component far exceeded that of

all other components. This may be attributed to the urgency of addressing the banana

INDICATIVE (FMO) ACTUAL

ECUs % ECUs % ECUs

BANANA PRODUCTIVITY AND QUALITY 6.00 23 9.08 30 8.36 57 30.3

AGRICULTURAL DIVERSIFICATION 6.00 23 6.7 22 1.15 8 3.79

ECONOMIC DIVERSIFICATION 8.00 31 12.66 42 3.89 27 12.8

PROVISION OF SOCIAL SAFETY NETS 1.00 4 0.96 3 0.76 5 2.5

EDF/PMCU 2.00 8 0.7 2 0.43 3 1.4

EVALUATION 1.00 4 0.25 1 0 0 0

RESERVES 1.72 7 0 0 0

TOTAL 25.7 30.35 14.61 50.8

APPROVED /BUDGETED

% TODATE

%TOTA

20



issue and the organised efforts of the SVBGA in ensuring speedy implementation of the

banana components.

As Cargill argues, the slow take up in other sectors was due to institutional weaknesses.

This was especially true in the failure of agricultural diversification initiatives whose

successes depended on the quality and strength of the marketing infrastructure and the

absence of a good policy mix to support the diversification efforts. Institutional

weaknesses therefore led to low utilization of funds earmarked for diversification.

Resources were therefore reallocated from the diversification component to the banana

productivity component, especially for investments in irrigation of bananas.

The evolution of EU donor support has shifted under the weight of obligations arising

from institutional changes at the EU and WTO level. The progressive evolution of EU

institutions in response to WTO rules and continued evolution of the EU as a common

market has influenced the type of financial support for the banana industry in St

Vincent. For example, a Special System of Assistance (SSA) was instituted in 1994 to

aid adjustments of ACP banana producers to the requirements of the new common

market and EU banana regime. In 1998, a new financing mechanism - a ten year Special

Framework of Assistance (SFA) - was instituted to provide support for the banana

industry and economies of the Windward Islands as they adjusted further to the

requirements of a WTO compatible regime.

Under the SFA scheme a global amount of approximately 7 Million Euros will be made

available annually to each of the Windward Islands during the first five year of the plan.

21



Thereafter the amounts provided will decrease with a maximum reduction coefficient of

fifteen percent. To access these funds countries have to develop a country strategy paper

with a clearly defined portfolio of investment projects agreed to by the EU. In St Vincent

the portfolio of proposed project cover Agriculture , Transport and Communication,

Education, Community Services and Tourism Development.

An overall FMO is required and funds will be made available in annual tranches subject

to annual monitoring reviews of progress carried out by the Stabex committee or its

representatives (EDF/PMCU 1999 pg 19). It was also envisaged that disbursement

procedures will flexible and although based on the principles of European Commission

procedures, would allow the EU Delegation in Barbados some autonomy thereby

facilitating early disbursement.

So far I have merely described the nature of key interactions in the matrix. A full SFM

analysis would require the development and examination of appropriate digraphs to

provide a cognitive map of the key influences on EU’s financial support. The digraphs

which arise from the matrix are so intricate that no attempt is made to present such

digraphs in this paper. The information on the Total Deliveries and Total Receipts may

also be analysed for assessing system centricity, stability, vulnerability etc. Again such

analyses are not undertaken in this paper. The selected analysis presented above should

however provide a sufficient feel for using the SFM as an analytical and organising

framework for studying the complex economic systems and relationships involved in

providing financial support to the banana industry.

22



DISCUSSION

A major aim in this paper was to present the SFM as an analytical tool of relevance in

studying economic problems and issues. A SFM analysis of factors influencing the

level and nature of European Union financial support for the banana industry in St

Vincent was used to illustrate the relevance and ease of using the SFM for such a

purpose. The SFM can be good framework for organizing a study of selected aspects of a

system, provided the issue to be studied is clearly specified. The SFM and associated

digraphs analysis made it possible to capture in one table the many variables which have

an impact on the level of financial support provided since 1992 to the industry. Given

the complexity of the matrix derived and the interaction of variables through the matrix,

it can be seen how a research programme can emerge from a SFM analysis

The SFM’s use in this study has been mainly descriptive It is an immense task to analyse

in depth the multitude of linkages identified in the matrix analysis, even for a small

matrix. This may be a major drawback in using the SFM. It may also be a strength if the

goal is gaining a thorough understanding of an issue or problem.

As Harary, Norman and Cartwright (1965 p 23) indicated, in interpreting nodes and

edges in a digraph an analyst may do so in terms of what actually happens, what should

happen, and what can possibly happen. In this paper the emphasis was on showing what

happens in a system (i.e., descriptive not normative use). With the matrices developed in

this study, analyses can be made of changes necessary to improve the level and nature of

EU support for the industry.

23



The possibilities of using the SFM for simulating system changes and studying

institutional development is arguably one of the most important uses of the matrices and

digraphs developed. It is of particular relevance for studying policy issues. If its use is

complemented by tools for analysis of specific policy issues, then the SFM can be used

to develop a policy agenda for further EU support and other industry needs.

A good feature of the SFM approach that may make it very useful for study of a system is

its transparency. If the matrix is developed as a heuristic device to organize thinking or

even if it is based on actual empirical research, it is possible for others to examine the

delivery patterns derived and to agree or disagree with the flows captured in the matrix.

This should make it useful in applied studies for discussion by staff who may have very

limited time for meetings with colleagues either because of inadequate staff levels of

because persons can only meet for very limited periods.

If it is used as a heuristic planning tool, each member of a planning team could derive a

SFM and digraph of the problem studied. By combining the various matrices and

digraphs, members of the planning team could come to an initial working understanding

of the problem by consensus among members. This use of the SFM approach can be

invaluable in developing countries where shortage of professional staff is a serious

constraint.

As a heuristic tool, the SFM may also be a very useful element of a farming systems

analysis. In the Caribbean the UWI and Ministries of Agriculture have used rapid

24



reconnaissance surveys to derive information for planning extension programmes. This

author looked at a sondeo report for an agricultural region in SVG (Campbell 1992) in

order to assess the potentials for combining a SFM approach with a sondeo for planning

purposes. There appeared to be many areas of overlap where the SFM could help to

structure the problem being studied and guide the planning of the sondeo. Members of

the multidisciplinary teams, for example, may participate in developing a SFM of the

problems on which information is sought. This would enable them to better identify

issues that may need to be explored with farmers and other persons interviewed. The

sondeo findings could in turn provide information on the nature and strengths of linkages

identified in the SFM (contextual validation). The combination of the sondeo and SFM

approaches could provide one solution to a the problem of adequately incorporating the

concerns of small farmers and other constituents who traditionally have little

opportunities to influence the priorities and policies of agencies that are supposed to

serve them. The possibilities of combining the SFM and sondeo approaches should make

for an interesting research project.

The SFM approach, however, is not without its limitations. Development of a SFM

requires a good knowledge of the system being studied. The need for extensive

socialization of the theorist is a potential drawback. Where an analyst has extensive

knowledge of the system, the SFM may be an excellent approach. Where such

knowledge is missing, the problem of identifying relevant issues, matrix components and

deliveries may be formidable.

25



The need for an efficient system for data storage and manipulation is not too big a

problem where adequate computer facilities and software are available. Where these are

unavailable, application of the SFM approach becomes daunting. Although the matrices

may be developed manually, this author's experience is that it may be so physically

demanding a task that it may discourage use of the SFM. Fortunately, software packages

that allow data storage and manipulation are becoming increasingly common in

developing countries. The preparation of digraphs is not as easily solved. If digraphs are

required in a planning situation then a sufficiently wide wall, suitably covered with blank

newsprint, would allow drawing of the required digraphs, with relevant system flows

written in.

As we search for new paradigms within which to evaluate the impact of globalisation the

SFM can be a useful addition to the intellectual tool box used Clearly there is a need for

further research on using the SFM, as well as its application to real world problems.

26



REFERENCES

Cain, Ashley. R., 1993, A Social Fabric Matrix Analysis of the National Agricultural

Research System of St Vincent and the Grenadines M.EC Dissertation., University of

New England Australia (Unpublished).

Campbell, D., 1992, Farming Systems in District 8 North and South, District 7 and

District 6 North and South St Vincent: Report of a Rapid Reconnaissance Survey. UWI,

(unpublished)

Cargill Technical Services, 1999, Dominica, St Lucia, St Vincent and the Grenadines

Evaluation of Projects funded from Stabex 1994.

Brinkerhoft., Goldsmith A.A. 1992 'Promoting the Sustainability of Development

Institutions: A framework for Strategy.' World Development 20 (30), pg 369-383.

Echeverria, R.G., 1990, ‘Assessing the impact of Agricultural research’ in R.G.

Echeverria (ed) Methods for Diagnosing Research System constraints and assessing the

impact of Agricultural Research, Vol.11 Assessing the impact of Agricultural research,,

International Service for National Agricultural Research, The Hague.

Hayden, Gregory .F., 1982a Social Fabric Matrix: From Perspective to analytical tool’,

Journal of Economic Issues 16(3): 637-62

Hayden, Gregory .F., 1982b ‘Organizing policy research through the social fabric

matrix and system digraph: a boolean digraph approach’, Journal of Economic Issues

16(4): 1013-1026

Hayden, Gregory .F., 1986, ‘Defining and articulating social change through the social

fabric matrix and system digraph’ , Journal of Economic Issues 20(2): 383-392.

Hayden, Gregory .F., 1989, Survey of methodologies for valuing externalities and

Public goods. Unpublished.

27



Hayden, F.G., 1988 Values, Beliefs and Attitudes in a Socio-technical setting.

Journal of Economic Issues 21 (2). 415-426.

Hayden, F.G., 1986 Defining and articulating social change through the social fabric

matrix and system digraph Journal of Economic Issues 20 (2) June 1986 383-392.

Harary, F., Norman R.Z., Cartwright d. 1965 Structural Models: An Introduction to the

Theory of Directed Graphs. John Wiley & Sons, New York.

Kast, F.E. and Rosenzweig, J.E., 1974, Organization and Management . Mc Graw Hill,

Kogakusha, Tokyo, 2nd Edn.

King Leslie A. ‘Institutional Interplay – Research Questions- A Report for InstitutionalDimensions of Global Change - Programme on Global Environmental Change’.

University of Vermont, U.S.A.

Lower, M. D., 1987, ‘ The Concept of Technology within the Institutionalist Perspective,

Journal of Economic Issues, 21(3) 1147-76

McGuire, W.J 1985, ‘Attitudes and attitude change’ in G. Lindzey and E. Aronson (eds),

Handbook of Social Psychology, Volume II: Special Fields and Applications, Random

House, New York, 233-346.

Warkentin, M.E, and Menter, P.W., 1982, ‘An Apple II computer program for the social

fabric matrix and boolean digraphs’, Journal of Economic Issues 16(4): 1027-37 .

social fabric matrix as analytical tool to study eu banana regime and banana industry in st vincent

Documents