Grassroots

Presentations from the forum held in the Hall of the AmericasOrganization of American States, Washington, D.C.July 16, 2001

The Unit for the Promotion of Democracy,General Secretariat of the Organization of American States and The Inter-American Foundation
BUILDING 

DEMOCRACY 

FROM THE 

GRASSROOTS

Presentations from the forum held July 16, 2001, in the

Hall of the Americas, Organization of American States,

Washington, D.C.

The Unit for the Promotion of Democracy,

General Secretariat of the 

Organization of American States 

and 

The Inter-American Foundation
Conference Coordinators

Anne Marie Blackman Emilia Rodríguez-Stein

Senior Specialist Director 

Unit for the Promotion of Democracy Office of Evaluation and Dissemination 

Organization of American States Inter-American Foundation

Building Democracy from the Grassroots

Publication Editor: Paula Durbin, Inter-American Foundation

Translation Supervisor: Leyda Appel, Inter-American Foundation

Cover concept: Marjorie Burdetsky, Capital Meeting Planning, Inc.

Design, layout and production: U.S. Government Printing Office
Organization of Inter-American 

American States Foundation

César Gaviria Frank D. Yturria

Secretary General Chair, Board of Directors

Luigi Einaudi Patricia Hill Williams

Assistant Secretary General Vice Chair, Board of Directors 

Elizabeth Spehar David W. Valenzuela

Executive Coordinator, President

Unit for the Promotion of Democracy

This is a publication of the Inter-American Foundation and the Unit for the Promotion of

Democracy of the General Secretariat of the Organization of American States. The

opinions reproduced or summarized herein are not necessarily those of either the IAF or

the OAS. Certain material in this document is copyrighted and may only be reprinted

with permission of the copyright holder.

Contents

vii Introduction

ix Summary of the Proceedings

1 Presentations

3 Building Democracy from the Grassroots

David Valenzuela, Inter-American Foundation

5 Introductory Remarks

Elizabeth Spehar, Organization of American States

11 Keynote Address: The Third Sector in Global Perspectives

Lester M. Salamon, Johns Hopkins University

23 Participation and Decentralization: 

Instruments for Development

Carlos Hugo Molina Saucedo, Center for Participation and Sustainable Development, Bolivia

33 Citizen Participation, Local Governance and Appropriate 

Policy Framework: A Contemporary and Futuristic View

Neville Duncan, University of the West Indies

43 How Governments, Corporations and NGOs Partner to 

Support Sustainable Development in Latin America

Beryl Levinger, Educational Development Center

47 All of the Voices

Ramón Daubón, Kettering Foundation

63 Coordination and Partnerships for Local Development: 

The Experiment of the Matching Fund for the 

Development of Nejapa

Marcos Rodríguez, National Foundation for Development, El Salvador

73 Building Democracy from the Grassroots in Bolivia

Ronald MacLean Abaroa, Government of Bolivia

77 Conclusions and Implications

Darcy Ashman, Independent Consultant

79 Panelists’ Biographies

v

I

n the past two decades of resurgent democracy throughout the Americas,

modernization and reform have led to decentralization of decision-making;

the transfer of functions, responsibilities and resources to sub national entities; and increased autonomy at the local level. Striking among the changes

sweeping the hemisphere has been the direct election of local authorities, a practice that implicitly identifies villages, towns and cities as vital spaces for democratic expression and initiatives leading to a better quality of life.

On July 16, 2001, the Unit for the Promotion of Democracy (UPD) of the

General Secretariat of the Organization of American States (OAS) and the InterAmerican Foundation (IAF) jointly hosted an intensive one-day forum on Building

Democracy from the Grassroots. Forum participants, including policy-makers, scholars, representatives of international agencies and development practitioners from

throughout the hemisphere, examined the critical role of decentralization in consolidating democracy, promoting citizen participation and reducing poverty.

The forum’s underlying assumption was that the success of decentralized

governance depends on an enabling environment created by appropriate and

flexible policies. It falls to central governments to design, innovate, support, coordinate and adjust the institutional framework for local autonomy, while lending cohesion and sustainability to the processes on the national level. Given a

long history of centrist tradition, and very different national contexts, it is not

surprising that progress in decentralizing the state and fostering local governance has been uneven in the hemisphere, and, in general, slow.

Nonetheless, leaders have clearly reaffirmed the commitment to empowering local governments and promoting increased involvement by civil society in

public policy. The unambiguous support articulated at the Summit of the Americas in Quebec City this year, including for the UPD’s Program of Cooperation in

Decentralization and Local Government, led to the Meeting of Ministers and

High Level Authorities Responsible for Policies on Decentralization, Local Government and Citizen Participation in Municipal Government in the hemisphere.

Held in La Paz, Bolivia, from July 29 to 31, this dialogue culminated in the InterAmerican High Level Network on Decentralization, Local Government and Citizen Participation, a mechanism for cooperation among those most directly involved in the consolidation of local government as the cornerstone of

democracy and, over time, of development.

Building Democracy from the Grassroots aimed to focus attention on the

themes of the ministerial meeting and to contribute to the reference material

vii

Introduction
available for implementing the decisions that resulted. Specifically, the forum

was designed to achieve the following:

• highlight the policy challenges for decentralization and local government

strengthening;

• analyze experiences from a range of policy frameworks and the complex

interplay and alliances formed among central and local government and

civil society;

• examine the context and achievements of an award-winning best practice

in local governance and extract lessons learned;

• identify implications for policy formulation and design, including how

governments can facilitate, promote and consolidate democracy from the

most basic level.

The OAS is an inter-governmental forum for political dialogue and cooperation on the hemispheric agenda. The Inter-American Foundation, an agency of a

member state, the United States, works to promote equitable, responsive and

participatory self-help in the local context. This publication represents a joint effort by both institutions to make available to a wider audience the issues debated

and information shared at the Building Democracy from the Grassroots forum. We

hope it will benefit all of you interested in strengthening democracy as a means

to better conditions in communities throughout this hemisphere.

Elizabeth Spehar David Valenzuela

Executive Coordinator President

Unit for the Promotion of Democracy Inter-American Foundation

viii Introduction
An invited audience of more than 250 international affairs professionals

heard experts from throughout the hemisphere explore the challenges

and opportunities of decentralization at the all-day forum Building Democracy from the Grassroots, sponsored by the Inter-American Foundation and the

Unit for the Promotion of Democracy, General Secretariat of the Organization of

American States on July 16 in the Hall of the Americas at OAS headquarters. 

Context

Four panels discussed the sweeping changes throughout the Caribbean and

Central and South America that had prompted the forum. In recent years, the region’s democracies have taken deliberate steps to transfer public resources and

functions from overloaded, often distant central bureaucracies to more flexible

municipal units. For example, according to Minister of Sustainable Development

and Planning Ronald MacLean-Abaroa, who participated in the final panel of the

day, Bolivia’s fiscal allocation to the country’s municipalities has grown to 3 percent of the gross domestic product and an increase to 12 percent is projected. 

Throughout the hemisphere, municipalities will be expected not only to deliver basic services but also to initiate and coordinate development projects. Decentralization means municipal officials are elected locally, rather than appointed by the central government, thereby re-aligning political accountability.

Constituents potentially have a greater voice in their communities and more opportunity for self-help. These developments have far-reaching implications not

only for socioeconomic development but also for democratic consolidation in

the region.

Welcome by Representatives of the IAF and the OAS

The conference opened with a joint welcome by representatives of the cohosts, IAF President David Valenzuela and Elizabeth Spehar, executive coordinator

of the OAS’ Unit for the Promotion of Democracy. In his address, Mr. Valenzuela

expressed the hope that increased local autonomy and popular participation

would “help national democracies become fully functional,” emphasizing that

“good local government is the cornerstone of good national government.” He

also pointed out that “sustainable poverty reduction and the exercise of democracy go hand in hand.” Local development, he said, is most effective when its intended beneficiaries are actively involved in the projects designed to alleviate

poverty and better conditions.

ix

Summary of the Proceedings
Ms. Spehar also focused on “the importance of citizens organized in the

service of development.” She cautioned that decentralization is “not a panacea”

and pointed out it had been analyzed more in terms of its economic than its political consequences. She hoped the forum would help improve the “design of

integral polices for decentralization, our knowledge of its effects and the variables affecting them.” 

Keynote Speaker: Lester M. Salamon

Professor Lester Salamon, director of the Center for Civil Society Studies at

Johns Hopkins University, addressed “The Third Sector in Global Perspectives.” He

defined this sector, whose various names include “civil society,” as neither the

state nor the market but the organized, private, nonprofit, self-governing, voluntary entities that work on their own initiative and out of a sense of community,

for the public good. A salient feature of the 20th century, he said, has been the

proliferation of these nongovernmental organizations (NGOs). This “massive upsurge in voluntary activities” has occurred in response to the failure of the state

and the market to provide essential services and resources; it has been catalyzed

by the communications revolution and economic growth. 

The funds it administers and work force it employs make the Third Sector the

world’s eighth largest economy. Nonetheless, its legitimacy, effectiveness and its

sustainability, both financial and in terms of human capital, continue to be questioned. To overcome its vulnerability to such challenges, the third sector must

collaborate in three arenas: First, its own ranks must join forces to advocate for,

inter alia, legal status, tax incentives for philanthropy, and its multiple causes and

communities; they must pool resources to provide infrastructure, training and administrative services. Second, the third sector must collaborate with the business

sector. Finally, while preserving its independence, it should collaborate with the

state which can confer legitimacy and provide substantial financial support.

In the future, Professor Salamon concluded, public problems will be addressed through the application of the combined resources of all three sectors:

the state, the market and the third sector. “The appropriate paradigm for the

21st century,” Professor Salamon said, “is a paradigm of partnership and a politics of collaboration.”

Panel Presentations

In her summary of the conference discussions on how decentralization can

lead to local development, final panelist Darcy Ashman noted the perspectives

ranged “from the macro policy environment to micro experience.” The first

panel concentrated on policy issues; the second on conclusions drawn from

studies of local alliances between and among the public, private and third sectors; the third on successful partnership initiatives to better conditions in Nejapa, El Salvador. 

Panel 1—Democracy, Decentralization and Local Government

Carlos Hugo Molina, President, Center for Participation and Sustainable Development,

Bolivia

Jaime Torres Lara, Executive Secretary, Latin American Chapter of the International

Union of Local Authorities; Executive Director, Latin American Center for Training

and Development of Local Government (CELCADEL), headquartered in Ecuador

x Building Democracy from the Grassroots
Neville Duncan, Director, Consortium of Graduate Schools of the University of the West

Indies (UWI); Director, Sir Arthur Lewis Institute of Social and Economic Studies

(SALISES), UWI, Jamaica

Moderator: Elizabeth Spehar, Executive Coordinator, UPD/OAS

This panel discussed the appropriate policy framework to facilitate decentralization, strengthen local government and promote citizen participation at

the local and community level.

Dr. Molina emphasized citizen participation as essential in a decentralized

democracy. The state must provide the authority and the technical conditions

for citizen participation: a framework of law and regulations; a public body in

charge of enforcing the process; concrete goals for transferring power and resources; empowerment of the various levels of government and civil society; access to information; and support for certain weaker, marginalized sectors. Among

the challenges to participation in Latin America, Dr. Molina enumerated economic development and the technology gap.

Mr. Torres Lara spoke of citizen participation as beginning with municipalities. (“The world is made of cities,” he noted at one point.) Municipal government must be, inter alia, democratic, participatory, responsive, transparent and

encouraging of economic development. Where municipalities do not enjoy sufficient economic, legislative and political power, he said, the influence of wealth

and corporations takes over. He recommended municipalities organize into associations and strengthen the networks formed. In response to a question he observed that this cooperation has an international dimension.

Dr. Duncan said the establishment of a “Third Sector” required “a third

economy to finance employment, rather than unemployment” and take people

out of poverty. The Caribbean’s small-scale, small-scope societies are especially

vulnerable to natural and man-made disasters and need special consideration in

the region and the hemisphere. Professor Duncan called for a new kind of politics and revitalized, reconstituted organizations that would require people in

communities to add value to limited state resources and would facilitate a more

equitable distribution of goods and services. “Only democratic interaction and

new organizational frameworks would bring about the fullness of the revolution” Dr. Duncan added, referring to Dr. Salamon’s address during the question

and answer session. 

Panel 2—Building Local Alliances

Introduction: Emilia Rodríguez-Stein, Director of Evaluation and Dissemination, InterAmerican Foundation

Ramón Daubón, Senior Associate, Kettering Foundation

Beryl Levinger, Director, Center for Organizational Learning and Development,

Education Development Center

Moderator: Patrick Breslin, Director of External Affairs, Inter-American Foundation

This panel explored the policy framework and the construction of local alliances bringing together public and private sectors and civil society. Both panelists based their conclusions on studies in several Latin American countries.

In analyzing how governments, corporations, community-based organizations and NGOs partner to support sustainable development in Latin America,

Dr. Levinger focused on mechanisms that make the partnerships work. Crucial

to success is trust, she said, but also important are flexibility and the absence of

a hierarchical structure. To achieve benefits, the “three C’s” must be present:

Continuity, or continued use of new skills and competencies; comprehensiveSummary of the Proceedings xi
ness, or a range of activities ensuring meaningful benefits; and coordination.

Dr. Levinger said partnership arrangements allow partners to “hedge their bets,”

or mitigate risks; partners can respond agilely to problems by pooling complementary resources and skills. She recommended central governments encourage

municipalities to partner with NGOs and the private sector by, inter alia, creating an “enabling environment;” fostering accommodation of informal agreements and procedures; and promoting research, innovation, public information

and assessment.

Based on his studies of eight successful partnership projects from the IAF

portfolio, Dr. Daubón emphasized the importance of a community’s ability to

“concert,” or connect and interact among strangers; the inclusiveness of the discussions; and the sense of ownership, possibility and engagement shared by the

individuals. Also crucial to success is the capacity to learn from civic action; to

build trusted institutions; to foster leadership that inspire, not expects, followers;

to innovate; to dialogue and negotiate. Dr. Daubón’s recommendations to

donors included the selection of projects with a civic focus; emphasis on staff

and advice rather than on funding; and a long-term commitment.

Synthesizing many of the previous points, Mr. Breslin used the metaphor of

jazz, a coordination of each element “doing its own thing,” to describe a successful partnership.

Panel 3—Experiences in Building Democracy from the

Grassroots

Introduction: Margarita Escobar, Ambassador, Permanent Representative of El Salvador

to the OAS

René Canjura, Mayor, Municipality of Nejapa, El Salvador 

Ernesto Barrientos, General Manager of Embotelladora Salvadoreña (EMBOSALVA), S.A.

Antonio Orellana, President, Consortium for the Development of Nejapa 

Francisco Mancia, Manager, Salvadoran Foundation for Integral Development 

Moderator: Marcos Rodríguez, Chief of Program, National Foundation for Development

This panel examined the context, achievements and “lessons learned” from

partnerships the Salvadoran municipality of Nejapa had forged with the central

government, local foundations and NGOs.

Rene Canjura, Nejapa’s mayor since its first municipal election in 1994,

heads a municipality of 30,000 residents. Despite its extreme poverty and other

negative socioeconomic indicators, as well as the scars left by the recent conflict,

deforestation, pollution and, earlier this year, two earthquakes in one month,

Nejapa has, under his leadership, initiated hundreds of development projects

that have improved its quality of life. Key to the mayor’s early successes was collaboration with Antonio Orellana’s Consortium for the Development of Nejapa

and several NGOs, including Francisco Mancia’s Salvadoran Foundation for Integral Development (FUSAI) which has received an IAF grant for its work in Nejapa

and others from European assistance agencies. FUSAI, which originated with the

peace accords in 1987, has mobilized resources and acted as a facilitator throughout this process, maintaining focus and monitoring. 

The municipality has also struck partnerships with the private sector, including with EMBOSALVA, the company that bottles Coca Cola, which was attracted

to Nejapa because of its abundant water supply and its roads. To obtain the necessary permits, “We visited the mayor,” said EMBOSALVA’s general manager

Ernesto Barrientos, “and I could see we had completely different ideologies. But

after a conversation, I told him we wanted to go to Nejapa, to be there forever,

xii Building Democracy from the Grassroots
accepted as a neighbor and friend.” Both Mr. Canjura and Mr. Barrientos acknowledged the importance of mutual trust and a common interest in bettering

their community. “Anything that helps us overcome the problems we all face is

worthwhile,” said Mr. Canjura of this unexpected alliance.

Marcos Rodríguez concluded Nejapa’s successful experience would have

been difficult without a democratic framework and the local government’s encouragement of grassroots organizations. 

Panel 4—Challenges and Opportunities

Ronald MacLean Abaroa, Minister of Sustainable Development and Planning , Bolivia

Darcy Ashman, International Governance Consultant

Moderator: Anne Marie Blackman, Senior Specialist, UPD/OAS

The final panel identified the principal themes of the deliberations and

pointed out challenges for formulation of future policy to facilitate building

democracy from the grassroots. 

Minister MacLean looked at Bolivia’s process since the 1930s when the poor

became aware of their “ownership” of their country. While the Law of Popular

Participation of 1994 was a great advance, a “silent revolution” that has changed

the face of the country, decentralization had begun seven years before, although

not without resistance from mayors and municipalities themselves. Nonetheless,

a result has been the direct involvement of the poor in the poverty reduction

strategy referenced in multilateral initiatives. Minister MacLean said most of the

funds freed under applicable debt relief provisions would be distributed to the

poorest municipalities in his country.

Ms. Ashman began her summary of the deliberations by pointing out the

well-acknowledged gap between the rhetoric of decentralization and the reality

of participation at the local level. Hypothetically, to bridge the gap, two

processes must happen: Power must be transferred from the center and from

local elites; and the grassroots level must organize, engage with government and

advocate for itself.

The implications for policy-makers wishing to facilitate this transfer vary according to their level. Central governments must enact strong policies, such as

Bolivia has done, and follow up with effective strategies, implementation plans,

scheduled goals and commitments. They must also formulate a body of policies

related to rights and entitlements. Donor governments must formulate policies

that encourage partnerships and nurture sound civil society organizations. They

must find flexible, innovative methods to support development projects over

longer time frames. For grassroots leaders discouraged after decades of combating

poverty and disenfranchisement, the policy implications of decentralization

present the possibility of “optimistic skepticism” or “skeptical optimism.” The

conference deliberations, Dr. Ashley said, specifically citing the case of El Salvador, provided evidence of opportunities to produce concrete benefits disadvantaged communities derive from collaborations with government, civil society

and business. 

The UPD moderator emphasized this conclusion when she closed her summary with the two messages inferred from the panels: First, democracy can only

be strengthened through people; and, second, there is a need for alliances,

teamwork and collaborative action. 

Summary of the Proceedings xiii

Presentations

I

would like to extend a warm welcome to everyone to this forum, which we

have called “Building Democracy from the Grassroots.” The focus of our attention is on Latin America and the Caribbean, but our message and ideas are

universal. If democracy is to become a reality, people at all levels must be transformed into empowered citizens with voice and vote. Of all levels of government, the local has the greatest impact on the lives of people, and it is at the

local level that democracy and accountability must take root before we can expect national democracies to become fully functional.

For 30 years, the Inter-American Foundation has had a unique window on

the grassroots or local level by supporting the ideas and self-help efforts of peasants, small farmers, women, youth, urban dwellers, squatters, street vendors,

small producers, artisans, indigenous people, Afro-Latin Americans and the

poor in general. Marvelous success stories as well as failures fill the annals of

the more than 4,300 local organizations the Foundation has funded in 32 countries in Latin America and the Caribbean. From this experience, I would like to

offer four observations:

First, poor and marginalized people, when given an opportunity, can be

amazingly resourceful, can build strong and sustainable organizations, are capable of enormous generosity and solidarity, and can be successful in improving

the quality of life in their communities. They are also able to generate participation and accountability mechanisms and stimulate the emergence of democratic

leadership. Grassroots organizations provide the space for building self-esteem

and the capacity to negotiate with other sectors of society. Nongovernmental organizations and other civil society organizations that have emerged throughout

Latin America and the Caribbean have played a critically important role in helping in the formation of grassroots organizations. In many countries, agencies of

the national government have also had a positive influence in this process. 

Second, grassroots organizations have remarkable resilience to adversities of

all sorts, but they can also flourish in a favorable environment. Over the past

decade or so, as most countries in Latin America and the Caribbean began a still

very incipient process of decentralization and direct election of municipal authorities, we have witnessed an impressive transformation of the dynamics in

many localities. In a growing number of cases, particularly in localities with an

infrastructure of strong grassroots and civil society organizations, we are witnessing new forms of participatory governance, where organized citizens are making

a difference and are being heard for the first time. 

3

Building Democracy

from the Grassroots

By DAVID VALENZUELA
Third, there is great potential for progress when communities are successful

in overcoming the barriers that have historically separated the various sectors of

society in much of Latin America and the Caribbean. Important improvements

in the quality of life of a community can occur when local governments, community and civil society organizations, and private businesses work together to

address local issues of common concern. Building partnerships and alliances is

key to closing the gap of distrust that has characterized the relationship among

the sectors in much of Latin America and the Caribbean.

Fourth, sustainable poverty reduction and the exercise of participatory

democracy go hand in hand. One cannot occur without the other. We must

focus more attention on governance for clues to find answers to the riddle of

why Latin America and the Caribbean remain poor. While we must promote effective governance at all levels, good governance can have the greatest impact

on the quality of life of people at the local level. Good local governance is the

cornerstone for good national governance. 

In this forum, we will focus on several elements that form the basis for democratic practices. First is the role of citizens and civil society in the governance

equation. We will then examine the enabling policy environment that helps foster local democratic practice, including decentralization. 

Next, we want to share with you the results of two studies that include approximately 20 Inter-American Foundation grantees in eight countries. One

study looks at what makes partnerships work, and the other explores the relationship between grassroots organizing and democratic practice. 

After lunch, we want you to meet a real partnership and its key representatives from a novel experience in El Salvador. We invited the mayor, a business

leader, the head of a community organization and an NGO representative to tell

us first hand how they are working together to solve some of the problems of

the Municipality of Nejapa. 

We will close the forum with some thoughts from Ronald MacLean, the former mayor of La Paz and current minister of sustainable development and planning in Bolivia, and Darcy Ashman whose experience is primarily in other regions of the world, but who should offer valuable insight. We have a tight

agenda, but we hope to have some time for your questions and comments. 

We at the Foundation are very pleased to join forces with the OAS’ Unit for

the Promotion of Democracy in sponsoring this forum. Thank you very much

for coming. I will now turn the podium over to my colleague Elizabeth Spehar,

executive coordinator of the Unit for the Promotion of Democracy. 

4 Building Democracy from the Grassroots
Your Excellencies, the Permanent Representatives and Permanent Observer

Representatives to the OAS, and distinguished guests: “Civil society,” “social capital,” “citizen participation,” “third sector,” “community empowerment,” “civic engagement”—these are just some of the many terms coined by

those concerned with the development of democracy in the world today. These

myriad expressions are but a reflection of different perspectives on a common

phenomenon, namely the recognition of the importance of citizens organized in

the service of development. 

The fact that our language is enriched by these terms is merely a reflection

of a new vision of the very concept of democracy. Developments such as the

breakdown of old paradigms and the emergence of a new framework of action

for public policy have led to a recognition of the importance of collective action, and an understanding of the way in which this contributes to development. This is a worldwide phenomenon whose significance is highlighted in all

political spheres. For example, it is explicitly mentioned in the most recent report of the Trilateral Commission on Democracy. (Cited in Putnam et al., Disaffected Democracies.)

Here in the Americas, this subject is also highly relevant, even controversial,

both in light of Robert Putnam’s views expressed on the decline of social capital

in the United States, and the valuable contributions of Professor Salamon, our

keynote speaker, whose views on what he terms “the Third Sector” will no doubt

enrich our deliberations. 

For all working to improve the quality of democracy in Latin America today,

this issue provides a tremendous laboratory for ideas and strategies. Working

with civil society has led to practical solutions for the numerous problems affecting millions of people in the hemisphere; it has also led to a re-definition and replacement of old models, while at the same time re-shaping the characteristics of

sustainable and equitable development. If we look at the panorama in Latin

America, we find a set of challenges which we must face in order to consolidate

and deepen democracy across the region. In general, we can speak of four main

areas for attention: the need to ensure more effective functioning and greater legitimacy of our democratic institutions; the challenge of strengthening civil society and elevating the level of what might be termed our democratic culture; the

need to establish a better framework for relations between the actors of the political process, that is, governments, political parties and civil society, in order to

ensure the governance necessary for development; and, finally, the guarantee of

5

Introductory Remarks

By ELIZABETH SPEHAR
more effective action by the state to resolve the problems of poverty and lack of

services, which affect a majority of citizens in our hemisphere. 

Building a New Paradigm

To meet these challenges, construction of a new paradigm for the functioning of the state and for democratic governance has become necessary. To understand public life in this new schema, it is evident the active participation of citizens in the task of development is a central element. However, for civil society to

fulfill this role, it is necessary to have the policy framework which will contribute to this objective. In other words, government can support, impede or retard community empowerment, depending on the adequacy or inadequacy of its

public policies. In the context of appropriate policy framework, decentralization

and mechanisms for participation have proved to be powerful tools to meet the

challenges to which I have just referred. 

Decentralization, understood as the effective transfer of power to local communities, can help to improve the action of institutions through a better distribution of state functions. It can empower the community and increase civic culture in the same way that it contributes to establishing a better framework for

governance both nationally and locally. And, of course, it has the great potential

for facilitating better service provision and more appropriate solutions to the

needs of citizens. 

This does not mean that decentralization is the panacea for all the problems

of democracy, but it is a powerful tool which, if effectively used, can have an impact on improving standards of economic, social and political development. 

For decentralization to fulfil its potential, it must have as its objective the

genuine empowerment of the community, and not solely the redistribution of

functions within the state apparatus. Thus, for the Unit for the Promotion of

Democracy, decentralization finds its best justification as a public policy because

it is the means through which more space is opened up to consolidate democracy and create social capital. In other words, we consider that decentralization

allows us to build democracy from the grassroots.

Decentralization as an Integral Process

In a recent publication on decentralization in Latin America, Professor Al

Montero and Professor David Samuels point out that the predominant view has

restricted analysis of the issue to the most recent reforms, losing sight of a more

historic and long-term vision which would help us understand decentralization

in the context of the construction of the countries of Latin America. Similarly,

we consider that most studies on decentralization to date have focused on the

economic and administrative aspects, rather than on the political aspects. 

If we take a quick look at most of the existing literature on decentralization,

and, above all, if we look at the body of work aimed at evaluating it, we will see

most of these very valuable studies have focused on issues such as the economic

effects of income distribution, the macro-economic effects of decentralization or

its effect on service provision. These issues are, of course, all extremely significant and important, but the comparison I am making is with their prevalence in

contrast to the scant attention paid to evaluating decentralization in terms of its

contribution to democracy.

What I want to draw attention to is the need for more analysis of decentralization and democracy in the region. To mention just some of the issues, by way

6 Building Democracy from the Grassroots
of example, what information is available on how decentralization has affected

the credibility of the democratic system in the eyes of the average citizen?

Twenty years ago few countries in the region had direct election of local authorities, whereas today the majority do. What has this meant? What consequences

has it had for the legitimacy of democracy? Or for the reconstruction of the political party system? 

In terms of the concerns of today’s meeting, it is even necessary to ask ourselves whether, in those countries which have instituted processes of decentralization, there has been a real impulse towards strengthening of civil society. Do

we have more social capital as a result of decentralization? Do we have a greater

degree of civic culture? Are local governments favorable to the development of

the Third Sector? 

It is evident there are numerous questions to be answered and a multiplicity

of issues to be explored. To embark on this task with adequate empirical documentation represents a challenge for all those interested in progressing along the

road to strengthening civil society. 

Today there will be presentations on a series of cases which will, I am sure,

illustrate the validity of what I have stated. The experience from El Salvador reinforces our belief, however, that we need to identify better methodologies and

more effective policy designs, finding common elements and models which can

be replicated so that these best practices and successful experiences can be transferred and repeated.

Elements for Policy Design

Convinced of the need for progress in designing better normative frameworks and in creating more effective contexts for political action on these issues,

the Organization of American States has convened, on July 29 to 31, 2001, the

first Meeting of Ministers and High Level Authorities Responsible for Policies on

Decentralization, Local Government and Citizen Participation. This meeting

seeks to develop the mandates of the summits of heads of state and government,

and to give greater impetus to the design of integral policies for decentralization.

Some of the elements one might consider necessary for an integral approach

to decentralization, taking into account its political, economic and administrative aspects, are the following: 

• The guarantee of direct popular election of local authorities as a basic element of political accountability. This should be accompanied by regularly

applied institutional mechanisms of accountability. 

• The promulgation of legislative or regulatory measures to promote social

participation as an integral component of decentralization. An example of

such measures is the proposed “ley de diálogo” or “law of dialogue” currently debated in Bolivia. When such measures are not possible, there

should be promulgation of measures complementary to those authorizing

the transfer of resources and functions, so as to guarantee citizen oversight. 

• The grant of greater autonomy to local government for the provision of

services under its responsibility, as well as for the definition of investment

priorities and for the allocation of resources. Only when citizens have important issues to resolve will they have the incentive to become involved

in deliberations on public policy. 

Introductory Remarks 7
• The design of regulatory frameworks recognizing the heterogeneous makeup of a country, promoting subnational development in its different regions and facilitating flexibility in administration. In this way, there will

be a greater opportunity for citizens to develop their initiatives and find

solutions appropriate to their specific circumstances. 

Strengthening Local Democratic Life

Nonetheless, it is not enough for the regulatory framework to provide for

possibilities for community empowerment; it is also essential for local government to be participatory. Otherwise the possibilities for empowerment will remain at the level of the theoretical. This is particularly true if one considers the

preponderance of urban issues and the great urban conglomerations which are

central features of the current demographics if the region. We need only recall,

for example, that in Latin America the level of urbanization has risen from 61.24

percent in 1975 to 73.39 percent in 1995. This trend is expected to continue. By

the year 2015 it will reach close to 80 percent and will be on par with levels of

urbanization in North America and Europe. 

This means that to a large extent, the solution to the problems faced by citizens depends on effective public management at the local level. Without the effective operation of cities and local governments, it will not be possible to resolve many of the problems related to exclusion and marginalization faced by

millions in the hemisphere. 

Measures which should be taken into account to facilitate local governance

and to contribute, from the realm of urban management, to the construction of

democracy from the grassroots include the following: 

• More effective division of cities into districts or zones for administrative

purposes. This would facilitate the organization of citizens for their participation in the solution of problems of which they are acutely aware because these problems are part of their environment.

• The generation of a process of consensus building and strategic planning.

This has proved to be a powerful tool not only to commit citizens to a

long-term planning process, but also to guarantee the cohesion of government action through successive administrations. 

• The identification of consensus solutions for immediate problems. Together with long-term processes, it is essential to find mechanisms for

consensus solutions to deal with urgent problems. Local pacts, community

contracting and, in particular, civic dialogue, are good examples of instruments for finding concrete solutions to immediate problems. 

• Improved access to information and capacity to disseminate public activities. This includes presentation of regular management reports and the institution of mechanisms of direct dialogue between the mayor and the citizens. In this regard, the use of new technologies is emerging as a powerful

support tool for the democratization of information. 

• Citizen oversight both in decision-making and in follow-up of administration action, and above all in public spending. In the latter case, this

should be accompanied by measures to ensure transparency in administration and to facilitate political accountability. 

• New mechanisms for participation, such as public hearings to discuss issues of particular importance; regulations for citizen initiatives to permit

citizens’ organizations to propose initiatives to their political bodies; direct

8 Building Democracy from the Grassroots
popular consultations so that voters might themselves decide on issues of

particular relevance to their city. 

• Civic campaigns to involve and empower social and volunteer organizations. 

• Defense of public forums as an essential element in community life. 

• Promotion of strategic alliances, especially with the involvement of the

private sector, with a view to solving specific problems or undertaking essential community projects. 

• Formation of citizens’ organizations to act as consultative bodies, advising

administrations and increasing the legitimacy of their decision-making. 

• Policies on civic education and the promotion of democratic values,

which should be developed in schools and relevant public administration

offices. 

Conclusions

As I have indicated previously, the local context is a privileged space for

the generation of values inherent in democracy. Nonetheless developing this

potential will depend not only on the interest of citizens themselves, but on

the ability of policy-makers to formulate effective regulatory frameworks and

local policies on participation. Taking this action from every corner of the

hemisphere constitutes part of the task of consolidating democracy and of

deepening its content. Democracy is not only an institutional apparatus, but a

way of organizing politically.

Our challenge, then, lies in improving the design of policies on decentralization, our knowledge of its effects and the variables affecting them, as well as the

real impact on democratic life. The effective incorporation of civil society into

local life is the best means of ensuring a greater degree of social capital and the

generation of a new political culture as an anchor by which democracy will permanently take root in Latin America.

I am certain that today’s presentations will assist us, not only with a deeper

understanding of this new axis of democratic life and development, but also

with developing better criteria for decision-making and action, so that we may

continue working toward building democracy from the grassroots, a task which

indeed is engaging countless thousands throughout the length and breadth of

the hemisphere.

Introductory Remarks 9

I

t is a special pleasure for me to appear before you today because of the deep

respect I have for the work that the Inter-American Foundation has been

doing over the past 20 years or more in fostering a true Third Sector in Latin

America. Well before many of us understood what the nonprofit sector is or

what it could contribute to social and economic development, the IAF was on

the ground in Latin America, fostering linkages among people and organizations, and building grassroots networks that now provide the foundation for the

kinds of partnerships that are the focus of this conference. This was pioneering

work, done beyond the glare of publicity and often without a lot of appreciation

from others. But it planted seeds that we are now harvesting, and without which

the task we will be discussing today would not even be on the agenda

My task today is to put this work into perspective by exploring the terrain

that IAF importantly helped to uncover. It is, without question, one of the least

visible, most obscure areas of human settlement—a place far less fully explored

than the upper reaches of the Amazon.

The task reminds me, in fact, of a poem by a Catalonian poet, Salvador Espriu, when he set out on a similar voyage of discovery: 

Understand and make yours from the olive groves, 

the high simple truth of the wind’s trapped voice.

People are many and many are their tongues, 

and many names are needed for a single love.

The “single love” about which Espriu wrote was his native Catalonian region

of Spain, a region whose language and identity were lost from view for more

than a century. The “single love” that brings us here is another subcontinent,

this one on the social landscape of our world, but one that, like Catalonia, has

remained all too invisible and poorly charted in most places up to very recently.

I am speaking, of course, about that vast collection of institutions and relationships that lies between the market and the state, and for which we too have

many names—Third Sector, nonprofit sector, civil society sector, voluntary sector, social economy sector, NGO sector, charitable sector and many more.

This is a complex and diverse set of entities embracing elite universities and

small day care centers, soup kitchens for the homeless and respected cultural institutions, human rights agencies and associations of lawyers and other professionals, labor unions, women’s groups and many, many others.

Whatever their purposes, these organizations share five critical features that

can be objectively identified:

11

The Third Sector in Global

Perspectives

By LESTER M. SALAMON
• First, they are organizations; they have some institutional identity.

• Second, they are private; they are not part of the apparatus of the state.

• Third, they are non-profit-distributing; they can earn profits but they do

not distribute them to their owners or directors.

• Fourth, they are self-governing; they enjoy a meaningful degree of autonomy.

• Finally, they are voluntary; participation in them is not compulsory and

they engage the freely given energies or resources of people.

What binds these disparate entities together and justifies treating them as a

distinct group, as a “sector,” is not the activities in which they engage or the

fields in which they work, but ultimately the values that these operational features allow and encourage them to embody. 

What, then, are the values the Third Sector embodies? Clearly, they are multiple. They include altruism, compassion, sensitivity to those in need, and commitment to the right of free expression. 

But underlying these, I believe, are two fundamental ideas. The first is the

idea of individual initiative for the public good, the idea that citizens have the

capability and the obligation to act on their own authority to improve their own

lives and that of others, to take matters into their own hands in order to improve the general welfare. This makes the right to form Third Sector organizations a basic human right, as fundamental as the right of free expression. Indeed,

in an organizational era such as ours, in which individual expression can have

little effect, unless citizens combine their voice with the voices of many others,

the right to associate is a necessary corollary of the right of free expression. Side

by side with the value of individual initiative for the public good, however, is

the value of solidarity, of community, the idea that citizens have obligations not

only to themselves, but also to each other, and to the broader societies of which

they are a part. This is what makes organized, voluntary action even more important than individual action.

In the time available to me today, I want to make five major points about

such organizations, about the contributions they can make, about the challenges

they face, and about what can be done to meet those challenges both in Latin

America and elsewhere.

The Global Associational Revolution

The first point is perhaps the most fundamental. I believe we are gathered

here at a special moment in the history of this set of institutions. As I have argued elsewhere, we seem to be in the midst of a “global associational revolution,” a massive upsurge of organized private voluntary activity, of structured citizen action outside the boundaries of the market and the state, that I am

convinced will prove to be as momentous a feature of the late 20th century and

early 21st century as the rise of the nation-state was of the late 19th century and

early 20th century.

The evidence of this development is apparent everywhere:

• Formation of new associations in France grew from 10,000 per year in the

1960s to 50 to 60,000 per year in the 1980s and 1990s.

• Half of all nonprofit organizations now in existence in Italy were reportedly formed in the past 15 years.

• Between 1989 and 1993, 23,000 voluntary organizations formed in Hungary.

12 Building Democracy from the Grassroots
• More than 100,000 such organizations have surfaced over the past eight to

10 years in Russia.

• More than 1 million nonprofit organizations are now recorded on registries and directories in India.

• We found registered in Brazil 210,000 nonprofit organizations, not to

mention the thousands of neighborhood and community organizations

formed over the past two decades that are probably outside the formal registration process.

• Impressive nonprofit mini-conglomerates, such as BRAC and the Grameen

Bank in Bangladesh or the Rural Reconstruction Movement in the Philippine, have formed in developing regions throughout the world.

This is not a wholly new phenomenon. The roots of the Third Sector reach

back deeply in history and we must be careful to avoid falling into a myth of immaculate conception that sees the contemporary Third Sector as a brand new development with no historical precedent. But there has clearly been a substantial

upsurge and rediscovery. 

Why?

Why is this happening? And why is it happening now? 

The answer, I believe, lies in four crises and two revolutions that have converged both to diminish the role of the state and to open the way for this increase in organized voluntary action.

The first of these impulses is the perceived crisis of the modern welfare state.

Over the past decade or so, the system of governmental protection against old

age and economic misfortune that had taken shape by the 1950s in the developed West no longer appeared to be working. Reduced global economic growth

in the 1970s helped give rise to the belief that social welfare spending, which

had grown substantially in previous decades, was crowding out private investment. The conviction coalesced that an overloaded and over-bureaucratized government was incapable of performing the expanded tasks being assigned to it.

The politics of the welfare state, moreover, regularly generated pressures for expanded government services that exceeded the willingness of the public to pay

for them. Far from simply protecting individuals against unreasonable risk, the

welfare state, many believed, was instead stifling initiative, absolving people of

personal responsibility and encouraging dependence.

Accompanying the crisis of the welfare state has been a crisis of development.

The oil shocks of the 1970s and the recession of the early 1980s dramatically

changed the outlook for developing countries. In sub-Saharan Africa, Western

Asia and parts of Latin America, average per capita incomes began to fall. Indeed,

economic performance in the least developed parts of these regions dropped so

precipitously that, given their high rates of population growth, average output

per person by 1990 was some 5 percent lower than it had been two decades before. Although progress has been made in some places—most notably the Pacific

Rim and parts of Latin America—every fifth person on the globe still lives in absolute poverty.

These discouraging realities stimulated considerable rethinking about the requirements for economic progress. One result has been a new-found interest in

“assisted self-reliance” or “participatory development,” an aid strategy that

stresses the engagement of grassroots energies and enthusiasms through a variety

of nongovernmental organizations. By making the poor active participants in

The Third Sector in Global Perspectives 13
development projects, this approach has scored significant productivity gains

while circumventing what in many places are weak state institutions. The result

is a growing consensus about the limitations of the state as an agent of development and the advantages of engaging third-sector institutions as well.

A global environmental crisis has also stimulated greater private initiative. The

continuing poverty of developing countries has led the poor to degrade their immediate surroundings in order to survive. Along with wasteful practices and inattention on the part of the wealthy, this has led to serious environmental degradation. Between 1950 and 1983, 38 percent of Central America’s and 24 percent

of Africa’s forests disappeared, and the pace of this decline accelerated in the

early 1980s. Overuse now threatens to turn to desert two-fifths of Africa’s nondesert land, one-third of Asia’s and one-fifth of Latin America’s. In some areas,

such as Central and Eastern Europe, acid rain and related air and water pollution

began to endanger food supplies and significantly reduced life expectancy.

As these and other aspects of the environmental crisis have become apparent, citizens have grown increasingly frustrated with government and eager to

organize their own initiatives. The stunning rise of Green Parties in Western Europe is one sign of this response. Similarly, environmental degradation was one

of the prime motivations for the emergence of an embryonic nonprofit sector in

Eastern Europe, with ecology clubs active in Poland, Hungary, Russia and the

Czech Republic.

Finally, a fourth crisis—that of socialism—has also contributed to the rise of

the Third Sector. While the promise of socialism had long been suspect, the replacement of laggard economic growth with actual regression in the mid-1970s

helped destroy what limited legitimacy the communist system had retained.

This failure ushered in a search for new ways to satisfy unmet social and economic needs. While this search helped lead to the formation of market-oriented

cooperative enterprises, it also stimulated extensive experimentation with a host

of nongovernmental organizations offering services and vehicles for self-expression outside the reaches of an increasingly discredited state.

Beyond these four crises, two further developments also explain the recent

surge of Third-Sector organizing. The first is the dramatic revolution in communications that took place during the 1970s and 1980s. The invention or widespread

dissemination of the computer, fiber-optic cable, fax, television and satellites

opened even the world’s most remote areas to the expanded communications

links required for mass organization and concerted action. This development,

moreover, was accompanied by a significant increase in education and literacy.

Between 1970 and 1985, adult literacy rates in the developing world rose to 60

percent from 43 percent. Among males, they reached 71 percent.

The combined expansion of literacy and communications has made it far

easier for people to organize and mobilize. Communications between capitals

and hinterlands that once required days now take only minutes. Authoritarian

regimes that had successfully controlled their own communications networks

have grown powerless to stop the flow of information through satellite dishes

and faxes. Isolated activists can therefore more easily strengthen their resolve,

exchange experiences and maintain links with sympathetic colleagues in their

own countries and abroad.

The final factor critical to the growth of the Third Sector was the considerable increase in education and global economic growth that occurred during the

1960s and 1970s, and the bourgeois revolution that it brought with it. During this

period, the world economy grew at the rate of 5 percent per year, with all regions

14 Building Democracy from the Grassroots
sharing in the expansion. In fact, the growth rate of Eastern Europe, the U.S.S.R.

and the developing countries actually exceeded that of the industrial market

economies. This growth not only allowed for material improvement and engendered a new set of popular expectations but also helped create in Latin America,

Asia and Africa a sizable urban middle class whose leadership was critical to the

emergence of private nonprofit organizations. Thus if economic crisis ultimately

provoked the middle class to action, this prior economic growth created the

middle class that could organize to respond.

A Major Economic Force

The result is that the nonprofit sector has emerged as a major economic

force throughout the world. Work we have done in 26 countries as part of the

Johns Hopkins Comparative Nonprofit Sector Project has revealed, in fact, that

as of 1995 nonprofit organizations accounted for 7 percent of the workforce, or

one out of every 14 workers—19.7 million full-time paid employees—and for

11.3 million full-time volunteers. The sector employs six times more people than

the largest private firm in each of these 26 countries.

Indeed, if the nonprofit sector in these countries were a national economy it

would be the eighth largest in the world, with $1.2 trillion in expenditures. Nor

is this merely an American phenomenon. To the contrary, four of the 26 countries we examined—the Netherlands, Belgium, Ireland and Israel—have nonprofit sectors that, relative to the size of their economies, are larger than that in

the U.S. Thus, compared to the 8 percent of total employment in the nonprofit

sector in the U.S., the figure is 9 percent in Israel, 11 percent in Belgium, 12 percent in Ireland, and 13 percent in the Netherlands.

In the developing world as well, and in Latin America in particular, the nonprofit sector turns out to be a far more important economic presence than previously recognized: Close to 4 percent of the nonagricultural labor force is employed in nonprofit organizations in Argentina, and elsewhere in Latin America

it is at least 2 percent.

The civil society sector goes well beyond the NGOs that have long been the

focus of international attention. Thus in Brazil, for example, nearly a quarter (23

percent) of the registered nonprofit organizations are social service providers, 20

percent are sport and recreation organizations, and another 14 percent operate

in the fields of education, research and culture. In terms of employment, development and advocacy comprise only a small part of nonprofit operations. In

Latin America, for example, our recent data indicate that development and advocacy organizations absorb only 7 percent of nonprofit employment, though with

volunteers included this reaches closer to 10 percent.

The Challenges

All of this is the good news.

The bad news is this: For all its recent dynamism and growth, the Third Sector remains a fragile ecosystem, vulnerable to external threats, unsure of its

sources of support, imperfectly rooted and legitimized, and, ironically enough,

often endangered by its own success. This brings me to my fourth point: the success of the global associational revolution is far from assured. Serious challenges

remain. What is more, these challenges take at least four different forms. 

The Third Sector in Global Perspectives 15
The Challenge of Legitimacy

The first of these is the challenge of legitimacy.

Despite the growing importance of the Third Sector in countries throughout

the world, and the growing tendency of governments to off-load social functions

onto it, this sector remains in a highly ambiguous position. So dominant is the

prevailing two-sector model of social life, which acknowledges the existence

only of the market and the state, the public and the private sector, that in most

countries the existence, let alone the scale and dimensions, of a definable “Third

Sector” of private nonprofit organizations remains largely unrecognized. The organizations compromising this sector are thus kept segmented in people’s consciousness, limiting their influence and role.

Even in the United States, where the concept of a not-for-profit sector has at

least been recognized for some time, basic information on this sector was largely

nonexistent until the early 1980s. Even now the sector is still not covered explicitly in national income accounts and its true character and role are only dimly

perceived. In other countries, the level of information available on this sector is

even less well developed. The sector is systematically ignored in national economic statistics, rarely mentioned in policy debates, overlooked in the press and

in public education, and remains a glaring blind spot in academic research.

Contributing to this lack of awareness of the Third Sector, and in turn resulting from it, is the legal limbo in which these organizations operate in many

parts of the world. Clear legal appreciation of the nature of nonprofit organizations and the rights to which they are entitled are still the exceptions rather

than the rule around the world. While the legal position of nonprofit organizations is fairly open in most common law countries, many civil law countries

have erected significant constraints. In Japan, for example, the right to form a

nonprofit organization has been treated not as a right, but as a privilege that individual ministries can bestow or deny at will. The registration of nonprofit organizations requires the approval of the Ministry of Social Welfare in Ghana and

Egypt’s Law 32 of 1964 empowers the government to disband nonprofit organizations almost at will.

Similar, or more serious, legal difficulties stand in the way of private charitable support: In South Africa, far from encouraging charitable giving, authorities

impose a philanthropy tax. In France, the formation of foundations requires the

explicit permission of the Council of State and associations are forbidden from

acquiring assets that might guarantee their long-term support. Adding to the legitimacy problems of the sector, finally, have been a variety of pathologies that

have recently tarnished the sector’s reputation: serious scandals over salaries and

benefits in the U.S. and the U.K.; fraudulent use of NGOs to channel public subsidies to politicians in Brazil; improper use of foundations as vehicles for tax

fraud in Central and Eastern Europe.

To overcome these problems, important steps will be needed:

First, we need to expand massively the basic information that is available on

this set of organizations, to bring the Third Sector out of the shadows and into

the light in a serious way. Fortunately, we are well on our way to doing this in

some 40 countries throughout the world through the Johns Hopkins Comparative Nonprofit Sector Project, the first systematic effort ever undertaken to chart

the scope, scale, structure, and role of the Third Sector in countries throughout

the world. The goal of this project is nothing less than to put the Third Sector

onto the economic map of the world in a systematic way, to determine the cir16 Building Democracy from the Grassroots
cumstances that seem to favor the emergence of vibrant Third Sectors, and to

create an on-going capacity to chart the health of this sector into the future. We

are now following this up through work with the UN to integrate the nonprofit

sector into regular national income accounting. A draft handbook for doing this

has now been tentatively approved and we hope to be approaching statistical

agencies to implement. The OAS could be of help by encouraging member states

to have their statistical offices begin using this handbook to create a new body of

empirical data on this important sector. 

Basic information, however, is just the first step. As a second step, we need to

launch serious public education efforts to make the public at large aware of the

Third Sector and the contributions it makes. The Third Sector can no longer rely

on its good works alone to assure public support. It must work to counter the

negative impressions often created by the media and those who would discredit

its operations. 

Thirdly, legitimization must take legal form. The right to associate must be

clearly and unequivocally enshrined in law. Beyond this, procedures for extending legal person status to nonprofit organizations and for ensuring favorable tax

status for the organizations and their contributors must be simplified and made

automatic once certain basic conditions are met. 

Finally, steps must be taken to ensure accountability of Third Sector organizations. A set of organizations that is expected to perform important public

functions and enjoy significant public subsidies must be responsive and responsible in how it handles funds and carries out the public trust. To this end, the

Third Sector should make efforts to develop its own codes of ethics and its own

systems of accountability.

The Challenge of Effectiveness

But the challenge of legitimacy is only one of the serious challenges that the

Third Sector faces around the world. Equally important is the challenge of effectiveness, the need to demonstrate the sector’s competence and capability.

This is an especially tricky challenge for a set of organizations that is best

known for its flexibility, its innovation and its responsiveness to grassroots inputs and concerns.

But Third Sector institutions are also organizations and, as such, face important challenges of institutional management and control. As they move more

fully into the center of societal problem-solving, moreover, the pressures on

these organizations to improve their management systems and to perform efficiently and effectively will grow.

In most countries, however, the education of nonprofit managers has been

hit-or-miss at best, and totally nonexistent at worst. Indeed, this has been defended as part of the special appeal of nonprofit organizations—their reliance on

volunteers and their rejection of rigid professional norms.

For the Third Sector to legitimize its operations, these sentiments will have

to change, at least in part, and serious efforts will have to be made to improve

the management of this set of organizations. This will require at least two sets of

activities: First: increased training of nonprofit managers in the “enablement” skills

that are critical to this sector—skills in enabling nonprofit managers to enable

organizations to enable communities. We have been involved in such efforts in

Central and Eastern Europe and the energy they release can be quite extraordinary. Not only is it necessary to improve the skills of individual nonprofit managers, however, but also it is necessary to create the infrastructure institutions that

The Third Sector in Global Perspectives 17
will be needed to sustain nonprofit effectiveness over the long run. Such institutions can provide information resources, training, Third Sector mobilization, and

general moral support. Infrastructure organizations of this type play a significant

role in the business sector; they need to be developed in the Third Sector as well. 

The Challenge of Sustainability

A third critical challenge facing the Third Sector at the present time is the

challenge of sustainability.

Sustainability is mostly at stake in financial terms: Many Third Sector organizations began as purely voluntary endeavors or with start-up support from foreign donors, both public and private. As they grow in scale and complexity,

however, they quickly outgrow these initial foundations and find themselves

face-to-face with serious issues of survival. The decline of foreign assistance in recent years has made the fiscal crisis of the Third Sector particularly acute as increased numbers of organizations find themselves having to compete for an ever

shrinking pie.

But financial sustainability is not the only sustainability issue the Third Sector faces. At least as important is the sustainability of the sector’s human capital.

As democratization proceeds in different parts of the world, Third Sector activists

find themselves drawn into governmental positions to replace the traditional officials they had worked so hard to depose, but leaving their organizations impoverished in human terms. The Third Sector is thus the victim of its own success.

Ironically enough, while the Third Sector may contribute to democracy, in the

short run democracy may undercut the Third Sector’s strength.

In the face of this challenge what can be done? 

First and foremost, efforts must be made to buttress the Third Sector’s private philanthropic base. Private philanthropy may be only one source of Third

Sector support, but it is a crucial source of the sector’s independence. As foreign

sources decline, indigenous sources of support must increase. This will require

propagating the concept of private giving as an obligation of all social strata and

not merely the rich. It will also require new attitudes on the part of the business

community and greater willingness on the part of Third Sector organizations to

reach out to the corporate sector.

But the Third Sector needs to avoid placing itself in the cage of assuming

that private philanthropy is its only source of sustainable support. This is not the

case anywhere. Even in the U.S. only 11 percent of total support comes from

philanthropy—including individuals, corporations, and foundations. In Western

Europe, the figure is much lower than this—5 to 10 percent. A reasonable target

is probably 10 percent of total revenue. Other sources of support will be needed

as well; including revenue from sales and fees. At the same time, the concept of

the Third Sector as a career, instead of a way station on the road back to government service, must take hold and training capabilities created that can foster this

career and give it the standing it needs.

The Challenge of Collaboration

This brings us to the fourth challenge confronting the Third Sector throughout the world, which I have termed the challenge of collaboration. This challenge confronts the Third Sector in three different arenas.

Collaboration within the Nonprofit Sector

In the first place, the nonprofit sector faces a formidable challenge in promoting collaboration within its own ranks. In many parts of the world, the re18 Building Democracy from the Grassroots
cent growth of the Third Sector has taken place not only in opposition to an authoritarian or neglectful state, but also in opposition to what were perceived as

traditional, paternalistic or clientelistic private welfare agencies. Beyond that, the

limited resources available create inevitable competition among even likeminded groups. Even when competition is not present, organizations frequently

have no sense of being part of a sector and sharing common problems. Environmental groups see no connection with groups working for human rights or promoting better treatment of the handicapped.

Despite this, I would argue that forging a common front among Third Sector

organizations—funders and fundseekers, newer NGOs and old-line assistance

agencies, environmental organizations and day care providers, professional associations and human rights groups—is an urgent necessity if the Third Sector is to

meet the challenges it faces and deal effectively with the myths and misperceptions that stand in the way of its acceptance.

This does not require eliminating diversity or merging all agencies into one.

Rather, even while preserving diversity there should be ways to find common

ground on a number of critical issues that all Third Sector organizations share.

These might include clarifying the legal basis of the right to associate and to

form Third Sector organizations for a wide variety of peaceful purposes; protecting tax incentives for organizations and contributors; promoting the ability of

nonprofit organizations to advocate on behalf of particular causes or communities; providing critically needed services for the sector—accounting assistance,

training, group purchasing arrangements, and the like.

Over time, the Third Sector must develop a voice and a capability to pursue

joint action on issues of common concern if it wishes to be effective in the

broader society in which it functions. 

Collaboration with Business

The second crucial arena for collaboration is with the business sector. Third

Sector institutions cannot expect to become permanently entrenched in their societies unless they find a way to generate business concurrence and support. Interestingly, globalization, for all its drawbacks, may offer important opportunities here. By making corporations vulnerable in their home countries for

activities they may carry out in far-away places, globalization may offer an important club that can be used by local nonprofit organizations to encourage

multinational corporations to cooperate in addressing public problems in order

to earn a good reputation in their home countries. More generally, Third Sector

organizations can give businesses the legitimacy they seek. 

Collaboration with the State

Finally, and perhaps most importantly, is collaboration with the state. The

nonprofit sector’s relationship with the state is one of the most important relationships it can have. Yet the nature of this relationship has been obscured in

much of the rhetoric that surrounds the sector’s development. Indeed a pervasive myth of voluntarism has grown up that obscures the real connection between these two spheres. Central to this myth is the belief that an inherent conflict exists between the nonprofit sector and the state, and that private giving

and voluntary action are the only valid sources of Third Sector support. To be

sure, this myth finds considerable support in the posture of state authorities toward nonprofit organizations in many parts of the world. State authorities have

often been repressive and unresponsive to citizen concerns. Civic associations

have often emerged precisely to counter state control.

The Third Sector in Global Perspectives 19
Yet, side by side with evidence of state-Third Sector conflict is an extensive

record of interdependence and collaboration.

Even in the U.S., the country where the tradition of philanthropy and voluntary action is thought to be most highly developed, only 11 percent of nonprofit income comes from all sources of private giving combined—individual,

foundation, and corporate. By contrast, government support is almost three

times as great, constituting over 30 percent of nonprofit revenue. In point of

fact, despite the emphasis on the nonprofit sector’s independence from the state,

collaboration, not conflict or competition, has been the characteristic relationship between the nonprofit sector and government for most of American history. The very first U.S. nonprofit corporation, Harvard College, was thus created

by an act of the Commonwealth of Massachusetts in the mid-1600s and benefited from a special corn tax enacted specifically for its support. Two-thirds of

the government moneys used for aid to the poor in New York City in the 1890s

went to private, voluntary groups. Although these relationships may have grown

significantly in scope and scale in the 1960s and 1970s, they are hardly new. Indeed, we have developed a widespread system of what I have termed “third-part

government,” in which government relies largely on other social institutions, including particularly nonprofit groups to deliver the services it finances.

Elsewhere, the picture is even more pronounced. Indeed, the data we collected through our Comparative Nonprofit Sector Project revealed that all

through Western Europe government functions as the tax collector of the Third

Sector. Government is the overwhelmingly dominant source of nonprofit finance in these countries, accounting for as much as 77 percent of the total in

Ireland and Belgium, 64 percent in Germany, and close to 60 percent in the

Netherlands. Nor is this simply an accident. To the contrary, it results from explicit policy as reflected in the German doctrine of “subsidiarity”; the Dutch

practice of “pillarization,” or organizing social functions like education, health

care, social services along religious lines and providing public subsidies for the

resulting institutions; the recent decentralization of social welfare provision in

France, including widespread use of contracting with nonprofit providers.

While this raises the threat of loss of independence, moreover, the key to

avoiding this, it seems, is not refusing government support, but making sure that

other sources of support are available as well.

Toward Civil Society: A New Paradigm for Solving

Public Problems

What all of this suggests is the need for a new paradigm, a new approach,

for addressing public problems in the 21st century. This is my fifth point, and it

is very close to the theme of this conference. Two such paradigms have dominated our thinking up to now. One of these stresses sole reliance on the market

and the other sole reliance on the state.

What we have learned in recent years, however, is that both of these models

are bankrupt. The market model, though it has recently staged a remarkable recovery, essentially collapsed in the Great Depression of 1929. The public sector

model fell with the Berlin Wall. To date, however, no alternative paradigm has

surfaced to replace these two. To be sure, the temptation will be strong among

Third Sector activists to advance the “nonprofit sector” as the panacea and to

urge complete reliance on it.

20 Building Democracy from the Grassroots
I would urge that this temptation be resisted. Without denying the vital

contributions that nonprofit institutions can make, we should be wary of claiming more than we, or any sector, can deliver. The simple fact is that what we

have learned most clearly over the past 100 years is that today’s problems are too

complex for any one sector to handle. If we are to make progress on these problems, therefore, the combined resources of all three sectors must be mobilized.

What this suggests is that the appropriate paradigm for the 21st century is a

paradigm of partnership and a politics of collaboration—i.e., a “new governance”

that emphasizes explicitly and centrally that collaboration, not separate action,

by the different sectors, is the best hope for achieving meaningful progress on

the serious problems that confront us today. 

I would suggest that this is the true meaning of the “civil society” about

which we hear so much today—civil society not as a sector, but as a relationship

among the sectors. A civil society is thus one with three distinct sectors but in

which these sectors have found ways to work together for the public good.

Given the suspicions that often exist on all sides, this will not be an easy future

to achieve or to manage. But it is the one that seems to me to offer the greatest

prospect for the future.

Let us, therefore, set about creating such civil societies.

The Third Sector in Global Perspectives 21

Background

The terms “governance,” “state reform,” “globalization, “good government,” “transparency,” and “citizen participation” are new additions to the

basic vocabulary of leadership of our peoples. But we must recognize that there

are no authoritative definitions for such terms nor are they completely accepted

by society as a whole.

Structural economic reform has left the administrative machinery vulnerable

in its basic areas of competence owing to the budgetary reductions that went

hand in hand with the bureaucracy’s reduction in force and the end of the entrepreneurial state. International lending institutions initially supported the proposed bureaucratic decentralization because it addressed the question of preventing corruption and reducing the power of central authorities which had

appropriated it.

As is ever the case with political and social developments, the reality exceeded the intent of those who put these ideas forward and, in some countries,

the proposed decentralization was tied first to restoration of democracy and then

to its strengthening. Decentralization therefore had to be characterized as instrumental so that it did not become a political objective in and of itself, or a proposal for globalization which, following fashion and trend, might be discarded

later when the reduction and macroeconomic organization phase had concluded.

Advantage had to be taken, with the support of certain international organizations, of opportunities to create an institutional framework that arose from

discussions of decentralization, opportunities rejected by myopic, corrupt administrations that had needed venal administrative systems to reproduce irresponsibility. Private managers were able to do in government service what they

could not within their own firms.

Various trial and error experiments were conducted, with the complications

and consequences expected when experiments involve peoples’ lives. These include systems for regionalized decentralization; for grouping intermediate authorities together; for inventing authorities and agencies; for gradual decentralization

by sector; for elections within intermediate authorities as an invented condition

to be met in democratizing administration; for radical transfers to offload jurisdictions because the operation of services from the central level was not economically sustainable; and for rash, nonessential privatization.

There was, of course, a political dimension, and we now can analyze a

gamut of decentralizing experiments involving military, populist, democratic,

socialist and totalitarian governments, and the rest of the terms we have had to

23

Participation and Decentralization:

Instruments for Development

By CARLOS HUGO MOLINA SAUCEDO
invent to describe our governmental myths. Decentralization in itself was not,

nor is, a guarantee that democracy will be consolidated, but the fact that decentralization is implemented may provide support for democracy, a fact that has

now also been empirically established.

During the process, public players emerged who might take the forefront in

the administration of jurisdictions and resources. We discovered municipal government as an emergent force in democracy and as a school for citizenship. The

next step was to institute a system that would effectively integrate municipalities

into the national development process without their becoming part of the structure subordinate to central government or becoming little republics administered by local political bosses. For this purpose, the practical instrument was autonomy. Taking into account the principle of respect for the selection of officials

and for the intent of such officials to administer their own resources, mechanisms were designed to enable the municipality, as an integral part of the state,

to carry out the tasks entrusted to it.

But perhaps the turning point in this process came when national bureaucrats, international consultants, politicians and academics simultaneously arrived by different routes at the same conclusion: Decentralization without citizen participation was a mere act of administrative reorganization, a mere

redrawing of organizational charts and breathing fresh air into functions. That

discovery was a moment of truth in the process, a moment when decentralization’s practical application, potential and limitations were examined. It was realized that, when the participation component is implemented, democracy becomes participatory; consideration must be given to concurrent investment

within the economy; there is a take-off point in the management of public utilities which deserve to be treated as something other than mere clients; and planning systems must take into account local players with the ability to know their

own needs and the right to assign priority to them.

Bolivia played a pioneering part in linking municipal and community elements in the Law on Popular Participation. We are at the stage of identifying effective participatory mechanisms that will enable us to reinforce the concepts mentioned at the beginning of this essay, without this constituting a constraint on the

enhanced effectiveness of public services, transparency in administration, the responsible exercise of authority, and respect for civil society and its organizations. It

would seem an easy list to draw up, but one nearly impossible to implement.

The Same Questions about the Same Problems

At the academic and political events we attend, repeated concerns are expressed that, regardless of the country in question, involve needs that must be

addressed. Apparently simple questions become complicated when the answers

available are not merely theoretical and technical but involve human populations who may suffer the consequences. The following apparently simple questions were posed at a seminar organized by SELA and CLAD in May 1997, in Antigua, Guatemala:

• What is decentralization? 

• What leads to decentralization? Does its justification lie in the economic

model, the political system or in organizational technology? 

• Which functions should be decentralized? Why? 

• To whom should such functions be transferred? How many levels of government are necessary? How should those levels interact? 

24 Building Democracy from the Grassroots
• How should funds be obtained and distributed, thereby preserving effectiveness and equity?

• What characteristics should the municipality have as the entity receiving

decentralized functions?

• What happens to the central level?

• How is the general interest served in a decentralized model? 

• What should be done to see that decentralization does not aggravate already substantial social and territorial disparities?

• How are technical and political reasoning linked in the process?

• What is the relationship between decentralization and participation?

• Who changes the agents of change?

Evidently, there are political concerns, involving the definitions to be used

in administrative action, that convincing instruments have not yet been found

that may be replicated everywhere. Those of us who have taken part in practical

experiments hear concerns expressed in various places that convey fears rather

than conviction, and my job often became to convey optimism regarding the

advantages of taking radical steps in these areas. 

Political Elements 

We are now witnessing the most profound political and social transformation that has ever taken place in Bolivian democratic life. Social change is not

being generated spontaneously. It results from a reading of objective reality, from

appropriate proposals, and from timely execution and leadership. To further

change, we must be aware of changes already made, their characteristics and the

justification for them. Only insofar as we come to terms with the scale of change

and the cost of producing it will we be responsible for continuing to strengthen

democracy. The institutional framework of the Bolivian state, with its governmental and societal elements, is being developed on the basis of certain basic

defining principles, which we must be aware of and apply:

(1) Participatory planning is an instrument for channeling grassroots social demand and subsequently taking it into account in municipal, departmental or national budgets. It also incorporates the community levels, with their organizations, as authorities to be taken into account in executing a strategic

planning process.

This social, organized and participatory component constitutes a guarantee

of effective results. Centralist and exclusivist policies hinder the conduct of sustainable activity, whereas popular participation is a mechanism for grassroots organization, channeling supply and providing responsible, comprehensive response to demand. It cannot be assumed that consistent results in social

development will be attained without the acceptance of organized society, a

democratic component in the process.

(2) Concurrent investment enables programs and projects to be administered jointly by national, departmental and municipal authorities, and makes social demand visible. It makes possible coordinated exercise of jurisdiction among

more than one governmental level, thereby creating shared responsibility for

public services. According priority to municipal governments as the democratic

basis on which the territory, population, resources and state investment are to be

organized establishes the principle that social and productive policy at the national and departmental levels will be conceived for execution at the municipal

Participation and Decentralization 25
level, freeing the higher state tiers from the temptation to act as designers, executors, overseers and evaluators of policy at one and the same time.

This principle has the advantage of bringing discipline to administration and

administrators. No activity defined at the national level should fail to recognize

that the organizational system descends to the department and, immediately

thereafter, to the municipality. At the same time, moving up the ladder, it is the

municipality that will organize social and community demands and channel

them to the corresponding levels of government through the prefecture. The prefectural level of authority, which serves as link, must be ready and trained to carry

out its task in a timely and effective manner. The analogy of the hourglass may

serve to illustrate the political administrative management system, the upper half

corresponding to the national level, and the lower half to the municipal and

community levels. The two halves of the glass are linked at the neck, representing

the prefecture. Respect for this principle will make it possible to overcome centralism, paternalism and the ineffectiveness of government administrators more

than 1,000 kilometers away from the targets of their administration.

In reference to generation of economic activity, creation of employment and

generation of surpluses for a population that only has experienced centralist action, a fundamental instrument is the proposed local economic development or

productive municipality. Here, the municipality will serve as a facilitator of community action, private enterprise and investors; investment designed to generate

surpluses that remains under the control of the players involved will create leverage to generate, in turn, greater investment and resources, thereby going beyond

basic demand relating only to infrastructure and the delivery of services.

Local economic development or the productive municipality involves three

interrelated and interacting conditions that must be met: Policies must be in

place to support trends in production; policies must be in place to support the

land tenure system; and development, lending and technical assistance mechanisms must be in place. In recent years, we have focused on the process of reducing the urban-rural gap. Now that the rural development process has taken off,

we must focus on the urban component, the basis on which political activity

will be generated in the coming years.

(3) The Bolivian Constitution provides that political and administrative authorities at the intermediate level will be appointed by the president. In keeping

with the principle of “crossed appointment,” prefects are appointed by the president, and councilors by the municipal governments, all deriving their legality

and legitimacy from the same source. This situation creates a space for a second

tier of democratic consensus-building, which is essential to governance.

It must be acknowledged that, beyond this Bolivian solution, there are others, ranging from election of intermediate territorial authorities, the establishment of autonomous areas to the federal proposals. It is not sufficient to insist

that care must be taken in opting for an administrative model if the objective of

the mechanism chosen has previously been identified. Each state has its particularities and, in the impromptu policy manifested in fashionable proposals, it

must be borne in mind that governance means legality, legitimacy, efficacy and

participation, conditions that must not be jeopardized by the verbose enthusiasms sometimes resulting from crisis. In any event, beyond particularities, coordination and concurrence among the national, subnational and local levels are

essential in guaranteeing the usefulness of a management instrument that is to

support the exercise of power, not the reverse.

26 Building Democracy from the Grassroots
(4) Application, in the political, economic and administrative spheres, of

checks and balances forces the state administrative apparatus to seek public efficacy through popular participation. The departmental council, in its relations

with the prefect, and the oversight committee in its relations with the town

mayor, and of both authorities in their relations with the national political level,

create relations for strengthening democracy in government administration.

Civil society with its territorial organizations is represented on the oversight

committee, and organizations of a functional nature would have to be represented on the departmental council. Thus two components are present that may

become important mechanisms for development.

Pooling municipal services facilitates the accumulation and investment of

resources and enables municipalities to be included that do not reach the population threshold. Pooling municipal services simplifies their delivery, management and administration; develops the concept of competition and partnership;

and replaces the excesses of mechanical and long-winded municipal autonomy

with another form of autonomy.

The reasoning is similar that underlies the operation of provincial popular

participation councils, chaired by the subprefect, and comprising municipal governments and productive and community organizations, with representation

from government agencies within the province. The territorial size of the

province enables the microregion concept to be used to plan development and

growth, and execute it in a coordinated manner.

(5) The process has demonstrated the need to establish alliances while at

the same time seeking elements that allow for the replicability, innovation and

adaptation. The attainment of human and productive development, in the

framework of the sustainable development model, requires the sum of the capacities and efforts of public and private entities, and the social sector. The capacities of these three players taken together ensure a shared partnership lead role,

each player having objective challenges that correspond to it alone. Alliances enable responsibilities to be shared and policy execution to be coordinated by public officials, investment and productive institutions, and the social partners who

will feel the impact and repercussions of the activity. In addition, the fact that

specific experience has been gained assists society to offer less resistance to the

new attitude required in substituting the paternalistic state with another whose

role is essentially regulatory, and in replacing social conduct accustomed to charity with other, actively participatory, conduct.

Awareness and handling of these five components is essential in developing

coherent political activity by the machinery administering the state and civil society comprising it. 

Areas to Be Defined

This philosophical and conceptual element of the Bolivian decentralization

model was borne in mind during discussion and application of the process. In

order to clarify what practical application of the academic proposal for good government entailed, we made an initial assessment of some areas needing to be defined prior to any decentralization process involving popular participation. Each

of these areas includes basic state authorities and players:

Participation and Decentralization 27
• Central executive power

– unification of administrative management, enabling follow-up, evaluation

and monitoring of the process to be carried out

– establishment of a national coordination level with a clear mandate

– national discipline to act at lower institutional levels without neglecting

governance

– special attention to investment funds as equilibrium instruments, establishing to which areas they are subordinate and their sphere of operation

• Delineation of jurisdiction

– clear definition of national, departmental and municipal jurisdiction to

avoid conflict and overlap

– identification of resources each will use in the exercise of jurisdiction

– establishment of the national authority with control and regulatory authority, the intermediate authority to serve as coordinator and executor,

and the local authority with responsibility for policy implementation

• Intermediate level of administration or government

– establishment of the intermediate level as the authority with responsibility for effective coordination

– “crossed appointment” of authority

– relations with municipal government within its jurisdiction

• Municipal government

– application of the principle of subsidiarity

– nationwide institutionalized system for municipal strengthening

• Determination of investment

– establishment of concurrent investment by intermediate and municipal

levels of government as an administrative social, economic and fiscal

policy instrument

– establishment of the authority with responsibility for determining what

investment is made

• Planning instruments

– identification, with the corresponding national, intermediate and municipal authorities, of planning instruments

– adoption of standards approved for mandatory application

• Citizen participation players

– political determination of citizen participation players and their relationship to the nearest government entity

– definition and scope of participation

– participation mechanisms

– nationwide institutionalized system for strengthening

• Relations with civil society

– identification of clear action with respect to civil society

– identification of productive players

28 Building Democracy from the Grassroots
• Relations with nongovernmental organizations

– linking authorities

– definition of framework for action

– concurrent investment by NGOs

– ways to establish ties

• International cooperation

– identification of the characteristics, methods and target sector(s)

– projection of requirements and trends that best channel multilateral and

bilateral cooperation and maximize the profit derived

Political Conditions

To reach the point where these definitions were incorporated into public

policy, some ideal and apparently theoretical conditions had to be met, conditions philosophically essential to obtaining results:

Determination of political objectives. This seems patently obvious, but less

so when we compare the various processes executed within our countries. The

proposal’s lack of clarity makes it difficult to implement or, put otherwise, it is

not easy to arrive when one does not know where one wants to go. This condition obliges us to consider decentralization and participation as part of a design,

rather than as isolated or specious measures.

Political will. In Bolivia, it took 12 years of discussion and 23 draft laws on

decentralization to demonstrate what can be achieved when one does not wish

or seek to move forward. It is not a question of obtaining support from and consensus with a particular executive or legislative body. Given the political structures of our countries, what is needed is harmonization of intent between those

who will enact the law and those who will apply it.

Clear institutional mandate. It is impossible to implement effectively an

enacted provision that does not establish an institutional framework or have

credibility. It is very difficult to create an institutional framework that works and

is functional and appropriate It is even harder for an institutional framework to

enjoy sufficient credibility to serve as a valid interlocutor. Yet this is the secret to

an administration that produces results.

A comprehensive proposal. The objectives of sectoral decentralization have

proved difficult to achieve. When the sector, whether health, education or basic

sanitation, is not effectively inserted into an integral system for human development, we will encounter action that is not interrelated and, frequently, lack of

consistency and efficacy. The same difficulty will arise if administrative machinery is not established that carries out its activity in a coherent and coordinated

fashion with the other players involved. Concepts of comprehensiveness, intersectorality and shared administration should cease to be taboo within government administration.

Act of faith. Jurisdiction, resources, powers, responsibility and functions are

difficult to delegate or transfer when there is a lack of faith, and the temptation

will ever be present to rescind the delegation or transfer. Every transfer must be

accompanied by sufficient will and discretionary capacity for authorities to carry

it out in the framework of the new realities. The challenge lies in the area of administrative merit providing justification for the action.

Simplification. Any process of change in this area must seek to assist the individual subject to administration in his relations with the state machinery. It

Participation and Decentralization 29
must therefore seek to simplify procedures. Reduction in the number of authorities, greater transparency and the removal of obstacles are changes that must be

implemented within administrative systems. 

Unification of authority. Government administrators suffer from a temptation to act simultaneously with respect to the same issues. Decentralization is

very attractive to the economic and planning sectors, and to sectoral authorities,

all of which find it genuinely difficult to act concurrently and in a coordinated

manner. One political decision that must be made is who will have responsibility for coordinating, with political authority and support, the sectoral and territorial decentralization authorities. Timely corrective measures and follow-up,

evaluation and monitoring of the process are central functions for which a responsible authority must be established. 

Political Decisions

There are no prescriptions or set formulas that apply to every case. For decision-making to take place at the central level, which must have administrators

within intermediate and local authorities, political decisions bear on several

spheres:

Establishment of national policies. Policies must be formulated that ensure

the activities flowing from them are designed to obtain results. In each of the

areas to be implemented, definitions would have to be provided enabling administrators to act with transparency. This means determining the desired outcome in advance.

Determination of activities to be carried out. For policies to be effective,

steps must be taken to implement them. Each policy must enable government

action to address the previously determined political objective and contribute to

achieving the other objectives set.

Creation of a follow-up, monitoring and evaluation system. A national system for follow-up of activities will enable their direction to be determined and

timely, effective corrective measures to be taken. The central level cannot relinquish its responsibility for the evaluation and monitoring mechanism. For the

impact of quantity and quality to be evaluated, reliable and verifiable indicators

are required.

Identification of the players. The traditional shortcoming of thinking only

in terms of government administrators must be overcome. Alliances, consensusbuilding and agreements are essential to controling measures taken with executors and beneficiaries. To the extent that such executors and beneficiaries can be

one and the same, a predictably positive result will ensue. Civil society, resident,

farmer, indigenous, community, productive and cooperative organizations become allies when they share in the execution of public policies wherein they

play privileged parts.

Identification of resources. In keeping with the preceding criterion, resources must be identified and assigned by every player involved. In addition to

effective economic resources, priority must also be given to credibility, community labor, material provided, and contributions of time and commitment. An

evaluation of each element must be incorporated in the corresponding budgets.

This component is essential in obtaining a social response. Central levels seeking

to continue to administer public funds in the traditional way, by taking a paternalistic and discretionary approach, will not succeed in addressing the logic of

the demand.

30 Building Democracy from the Grassroots
On the Threshold of Decentralization and Participation

It may seem pretentious, but evidence and reality bear me out. We had to

execute these activities at government level to achieve something that now

seems so straightforward and simple: popular participation and directing the

state machinery toward efficacy—activities which, despite having brought about

a change in government totally different from the initial application of these

measures, and emanating as they did from the democratic grassroots, continue

to be applied.

There is no perfect proposal. In reality, each of the elements mentioned

produced another series of difficulties that had to be identified and then resolved. If, for example, at the outset, we had had more clearly defined mechanisms for territorial organization, we would have encountered fewer difficulties

when territory as a development component was taken up. The same holds true

for requests for infrastructure and services, which, to be sustainable, also need

to incorporate the productive component. Development projects remain on the

drawing board and in the realm of political imagination, a situation which does

not address the need to improve the quality of life of our peoples. Popular participation is so serious and definitive for our democracies that every effort to attain it will be well worthwhile.

Dr. Molina’s references will be provided on request.—ED.

Participation and Decentralization 31

The Essentially Unpredictable Future

The future is essentially unpredictable. This in no way should prevent the

OAS and the IAF from trying to imagine a range of possible futures in order to

provide more control over a changing world order and better position Latin

American and Caribbean countries within emergent change processes and outcomes. To imagine a variety of possible futures is to have a plan for how to proceed to extract the best from the emerging situations. To have a shared vision

and teach people in their country and region how to think flexibly is as important as the specific findings derived from the effort. 

Easy agreement on a shared vision is not a readily achievable objective. As

the states of Latin America and the Caribbean engage the first decade of this new

millennium, a subtle and positive shift is occurring in all segments of society.

There is an increased emphasis on the future—what it might look like, what

challenges and opportunities it might present and in what ways we might be

able to respond most positively. This is emerging at a time of national reflection

for organizations and individuals alike. Perhaps none too soon—as changes in

our social fabric, resource base, business and political environments. Perhaps

most importantly, the pace and extent of changes in science and technology

launch us into exciting but uncertain territory in the 21st century. 

In the pursuit of a global approach to trade, investment, production, environment, intellectual property rights, competition policy and a new agricultural

regime, coming onto the global, hemispheric, regional, national and local agendas are certain major concerns. These include the necessity for new labour policies related to wage inequality, youth employment opportunities, moving people

from welfare to work, life-long learning, school-to-work transitions, growing inequality of wealth and income within and between countries, the working poor,

inter alia. There is the growing recognition that policy-makers in Europe, the

Americas, Asia, Africa and in developing island-states must formulate a new policy paradigm for a more competitive, knowledge-intensive global economy.

There is the awareness that while, in the short run, profits can be maximized

using a cost-cutting strategy, the long-term interests of workers, communities

and companies are better served by a value-added strategy which empowers

workers and requires high skills as well as product and technological innovation.

This value-added strategy requires high-performance work organizations with decentralized, participatory decision-making by highly skilled workers, and cutting-edge technologies. This decentralizing and power-devolving dynamic

33

Citizen Participation, Local

Governance and Appropriate Policy

Framework: A Contemporary and

Futuristic View

By NEVILLE C. DUNCAN
obliges the same impulse in political and social arrangements in the wider society as for the economy. 

There are many views on the future and only two are presented here—in

an exceedingly truncated form. The first major question is whether capitalism

will progress uninterruptedly (notwithstanding rise and fall, again and again)

in a cyclical manner or is now manifesting a terminal systemic decline. Systematic decline is manifested in, for example, a long-term squeeze on profits

on three fronts: the cost of labour; the cost of imports and infrastructure; and

the cost of taxation.

Some argue that in most fundamental ways, the contradictions of the capitalist system cannot be contained—hence terminal secular decline. Capitalism is

entering a period of chaos. A “politics of transition” is revealing itself. Politically,

anything is becoming possible. Each country or trading or economic bloc is trying to grab the opportunity for repositioning and to seek global hegemony. 

A second major view is that capitalist markets are inexorable—they always

eventually win. The great material prosperity obtainable during the 21st century

will be realized by only those nations that adopt and properly adapt to their own

conditions the fundamental economic and political virtues of the “American

Way of Life.” Twentieth century liberalism—even if by some other name—will

continue to drive political policies for the foreseeable future. An ever-increasing

government role will inevitably be required as population densities and levels of

technological complexity increase. There is the question of whether and when

government is a part of problem and whether and when it is the answer. Even

when it is a necessary part of the answer, it is always a part of the problem. 

Indeed, on this view, all kinds of excuses for dangerous protectionist policies

are being created. Europe and the United States squabble interminably over trade

restraints, and the wealthy nations of the world continue to unconscionably refuse to open their markets to imports from third world nations. Demagoguery

will remain the strongest force in democratic politics—the public will tend to

vote for those who promise benefits from the public treasury. The “rule of law”

will increasingly be replaced by “rule of men” for politically controversial rulings. The courts will become increasingly recognized as just another political

organ of government, which various interests must struggle to control. Economic freedom (capitalism), political freedom (multiparty democracy), limited

government (checks and balances on government powers, especially regarding

property rights and an independent judiciary), and individual liberty (legally enforceable individual rights) will become imperative as the only practical arrangement in a world of accelerating technological change. 

These major views add up to fairly similar requirements concerning good

governance and its necessity for achieving either liberal or a participatory democracy. The first view (Wallerstein’s) imagines a possible world under the democratic

control of those who really produce the world’s wealth and services. It could be

based on a principle of collective self-emancipation through collective self-mobilization. The combination of forces would be based on class, race, ethnicity, gender and so on, producing multiple economies but based on the decommodification of the world’s economic processes. This would be based neither on

ownership nor economic control; decommodification would then emerge as a

new socioeconomic form. So his expectation is for a new 21st century geo-culture

reflecting a “plural left” or shaped by “civil society coordinating organizations.”

The second view (Futurecast’s) is more pessimistic about the extent of this

geo-culture, fearing increasing demagoguery and corruption of the governmen34 Building Democracy from the Grassroots
tal process, with “big” government the primary social problem in the 21st century. Instead of a conscious drive to a new participatory democracy, liberalism

as economic freedom, multiparty democracy, limited government (the strong

enforcement of property rights and an independent judiciary) and individual

liberty continues. 

Within the Anglophone Caribbean, there is little doubt that the liberal democratic modal form of government, as inherited from the United Kingdom, will

continue. Nevertheless, it continues to exist in a truncated and highly unsatisfactory form, as is the case wherever liberal democracy is practiced. However,

there are the serious considerations about the appropriateness of this form of political arrangement in the context of the microstates with weak, dependent and

open economies. Small-scale societies have tiny production bases, high costs of

procurement of production inputs and services provision, low export levels accounting for miniscule proportions of world trade, and a small scope in general.

Natural and person-made disasters significantly impact small-state ecology.

These factors combine to place considerable stress on the governance capabilities

of these states determined to remain on the liberal democratic path. 

The new, retreating, mood in the international donor and aid community is

to give less assistance in more focused ways with a requirement for a more decentralized governance and involvement of social partners such as labour, capital, community-based organizations, other nongovernmental organization

(NGOs) and social philanthropic organizations. Anglophone Caribbean governments, themselves, have been experimenting with various forms of public sector

reforms and reviewing their local government systems, while engaging with all

civil society.

Civil Society and Governance

A defining of the field—civil society

The non-state sector embraces all actors other than political parties, parliament and its directly supportive institutions including the public bureaucracy.

This means labour and business organizations, nongovernmental organizations,

community-based organizations (CBOs), professional associations, philanthropic

groups from churches to private organizations, and other nonprofit organizations constitute the non-state sector. Usually, the notion of civil society is used,

but only as a heuristic device, to separate business and labour from the non-state

sector. One reason is that on occasions, business and labour organizations seem

to be in their own special relationship with the state as “social” partners. Technically, local government, as dependent state-created institutions, should be

lumped with the state but many have preferred to see local government, revitalized and restructured, as one of the pillars in a new system of governance incorporating civil society and central government.

Imperatives of community governance

The absence of a national consensus around a shared vision of a renewed society based on nationalism, sovereignty, independence and self-sufficiency

points to a high potential degree of ungovernability in Anglophone Caribbean

societies. There has been the rapid growth of nongovernmental organizations

and increasing demand for revitalized local government institutions because of a

number of developments. In a number of situations traditional structures of authority, methods and instruments have failed or eroded. New fields of sociopolitical activities have emerged. These require new organizational forms and evoke

Citizen Participation, Local Governance, Policy Framework 35
new patterns of interest-mediation. Many of these have yet to be strongly established. Nevertheless, in several of these areas, the new modalities have actually

emerged, such as the success of a co-management process in environmental matters and, indeed, strong new organizations have manifested themselves. 

A number of issues of great concern to the public and private actors are

now in the public domain, generating awareness and a demand to be heard.

This is evident in Barbados where public interest was high on the location of a

new sanitary landfill. Other issues include the introduction of casino gambling,

reform of public education, poverty eradication and the legalization of drugs

now deemed illegal. In Jamaica, in July, police and military incapability was

brutally exposed in a context where 25 persons lost their lives when law enforcement agencies undertook a search for guns in a “garrison” constituency.

The national debate in the aftermath of that occurrence has been strident. Law

and order issues present peculiar and difficult challenges for community governance. The existence of sufficient convergence of objectives and interests make

it possible to reach a synergistic effect or a “win-win” situation among central

government, local government and civil society. 

The selection of a style of governance based primarily upon cooperation,

trust and mutual understanding among the pluri-sector social partners is now a

preferred option for many. Complexity, diversity and dynamism, which characterize the changing situation in the Anglophone Caribbean, require multiple

partnerships to find workable answers to a new and better form of governance.

Governments of the Anglophone Caribbean are today better prepared to take on

this challenge, awesome as it is. The initial effort should be to identify those productive governmental activities in need of strengthening, promotion and expansion. If this were done without any imperative interest in conserving what exists

at any cost (as Peter Drucker noted), much would need to be changed or abolished. This would be so especially if attention were paid to results rather than

good intentions. 

Liberalization, privatization, deregulation, decentralization, deconcentration, community participation and democratization (in local, central and regional government within a country) give a stronger voice to people. Sustainable

development, environmental protection and social sector development are concepts incorporated into the notion of good governance. The European principle

of “subsidiarity” (sharing the decision load down below) and other systems of

decentralization and devolution of state authority and power, are important. Efforts to achieve empowerment through new institutions form the core of the

process of giving voice to citizens at the local level. It is expected that current

and future holders of state power will exercise the requisite political will. 

Research is revealing a strong indigenous capacity to achieve success and

sustain good governance activities by people and groups in communities. The

opportunity presents itself for the state to build a new legitimacy through participation with civil society and hence renew and strengthen itself for the development tasks ahead.

Some Cautions

In Jamaica, Suriname, Guyana and the Bahamas, representative local government system exists, but not in Haiti and Belize. This means a vital organizational structure for giving a voice to the local level is inadequately articulated in

most Caribbean Community and Common Market (CARICOM) member states.

36 Building Democracy from the Grassroots
Without vital features, such as a constitutional or legal status to ensure continuity and insurance against compromise, local government cannot perform the

vital function of giving a real voice to villages, towns and cities. To do so, furthermore, would require that all municipal and district councils meet the criteria

of full electiveness: well-defined and satisfactory financial autonomy and provisioning; status equal to statutory corporations; and the assignment of real functions as community development and empowering agencies. If existing community groupings cannot be built up to function similarly, then giving voice to

people in localities remains an unreal expectation. 

People in localities still do not have the framework for a direct voice in decision-making or involvement in other critical tasks of good governance, such as

monitoring and evaluating policies and participating in their implementation.

Developments in Dominica and St. Lucia offer the real hope that the features of

an appropriate system will be legislated and implemented in the near future,

notwithstanding a recent change in the party government of the Commonwealth

of Dominica. Reports on local government reform, sponsored by the Caribbean

Development Bank and requested by these governments, have been completed. 

So far, a restricted and almost pointless notion of local governance has been

purveyed by governments. Minimal resources and marginal tasks have been assigned the various administrative systems created. No real voice is given to the

people. Edwin Jones (1998) in a sociohistorical profile had noted the survival of

symbolic forms of “local government” which neither represented popular needs

and expectations nor reflected meaningful accountability. There is still much

ambivalence on the question of what such systems would deliver. As Jones

stated, the culture of ambivalence, resource starvation and a record of underperformance have helped undermine institutional legitimacy. He further noted regional local government systems have consistently embraced a limited and limiting vision of reform. 

So he correctly concludes the local government reform process has never seriously contemplated, much less implemented, the ideals of local governance. Emphasizing that it embraces community discourse and action, he argued that it is

not about providing services to the public but doing so for the public and with

the public. For him, only a reliance on an alternate set of concepts and reform

tools could convert these structures into genuine community or service organizations. So far, decentralization, applied as a mechanical transfer of power from central to local government, has not served to enhance local government capacity by

changing the consciousness and orientations of local stakeholders. Most local

government structures of the region lack the internal management capability and

reliable systems of control to achieve a performance monitoring and measuring

system ensuring accountability. At the local level, accountability requires a sensitive, caring, responsive and responsible bureaucracy. This in turn requires what

Jones refers to as the social foundations of civil society and governance.

Apart from the institutional view, Jones has argued that an environment of

trust, personal security and fairness of governmental transactions is a necessary

support. Additionally, the availability of basic life-sustaining goods, services and

opportunities provides a context where citizens can perform their full role as participants. The reinforcing and mutually beneficial relationship between civil society and local government may serve to limit the possibility for arbitrary or abusive state action, while at the same time augmenting the implementation

capacity of the state. Vigorous local government systems need, therefore, a vibrant civil society. The two must be articulated together in order to guarantee

Citizen Participation, Local Governance, Policy Framework 37
success. The purpose is to build permanent governance institutions as one

method of institutionalizing innovations. 

Jones has identified a number of steps in expanding and utilizing existing capacity, namely, to build organizational capacity from the bottom up; keep the

management and planning systems and procedures simple; rely on appropriate incentive systems; build a culture of self correction; and concert the action strategies. 

Institutional Framework for Community Action and

Empowerment in the Caribbean

In previous studies of non-state actors, I identified five categories of relationships in order to present the data and develop the argument. These allowed for

adducing in each category special lessons instructive for a new governing relationship, giving voice to people in localities. 

The first category identified those quasi-international nongovernmental

organizations (QUINGOs) which were, typically, engaged in poverty alleviation

and reduction. The source of funds was mainly international financial institutions (IFIs), such as the World Bank, Inter-American Development Bank and

the European Development Fund. Of course, the insistence was for governments to give semi-autonomous status to the created organizations where the

real controls were from the donor organizations, hence the description as

quasi-international organizations. 

If the objective was to deliver welfare more effectively and efficiently than

the state, then the IFIs and other donors could claim a fair measure of success. If

the objective was to empower or build sustainable institutional capacity, the success was much more qualified, since very few community structures and QUINGOS survived the withdrawal of funds. For a while, the lives of significant proportions of people in localities were touched through the redistributed resources.

The creative ways employed and the encouragement of the involvement and,

sometimes, the full participation of local groups were certainly salutary. The impact, however, was not sustained. Notwithstanding these outcomes, there were

clear pointers to the possibility for creating a truly national framework of community development organizations. The issue was not merely the continuation

of funding but also of creating the appropriate macro-social and macro-economic environment within a legislated or, preferably, a constitutionally guaranteed political framework. 

It is instructive that, in the present conjuncture, international agencies have

come to acknowledge the same need for a new political state with a new organizational ethos, rather than merely reformed structures or inserted appendages.

The reduction in the zeal to minimize the role of the state has also produced a

search for new ways of giving voice to people in localities. A re-empowered state,

going beyond delivery of welfare, is needed to legitimize and authenticate people and their local organizations and national networks. 

These are the unacknowledged lessons which international agencies would

have learnt from their “internationalization of welfare” period. Indeed, a

stronger expression would call it a form of administrative recolonization—that is

to say, little more than rigid and excessive bureaucratic control, under the guise

of reaching past governments to non-state organizations. 

Another consequential finding was that elaborate rules and procedures do

get in the way of establishing mechanisms and systems benefiting people in localities, especially in rural areas. Studies of a sizeable number of “success stories”

38 Building Democracy from the Grassroots
have shown that both QUINGOs and regular nongovernmental organizations

have increasingly played a critical role in development in all social sectors in the

Eastern Caribbean. On many occasions, they rose to the occasion and delivered

excellent service. Governments and donor agencies came to acknowledge that

because such organizations shied away from traditional ways of doing things,

crippling administrative procedures and accounting systems, the direct beneficiaries gained far more than if the projects had been undertaken by the state.

Communities and their groups also learned the value of collective productive activity on their own behalf. 

A fourth category for community institutionalization and empowerment is

the network organizations of national and regional NGOs. These in turn created

an overarching network of networks to undertake advocacy at national, regional

and international levels, and to undertake capacity and institutional building activities. Organizations such as the Association of Development Agencies,

Caribbean Peoples’ Development Agency, the Caribbean Natural Resources Institute and the Windward Islands Farmers’ Association have demonstrated their

value. They, in turn, along with specialist and broad-based organizations or networks, are members of the umbrella regional organization, the Caribbean Policy

Development Centre, which covers the entire language groupings in the

Caribbean. This enables participation and intervention at the level of the CARICOM and the Association of Caribbean States but also internationally, including

the World Bank’s NGO grouping and the World Trade Organization.

Innumerable NGOs and community-based organizations depend on the

availability of international funding to sustain their efforts. Success stories

abound, nevertheless. NGOs cover the gamut of needs in Caribbean states. National governments have established registers on NGOs. They have invited NGO

participation on national commissions. They have taken along NGOs representatives in government teams of delegates to regional and international conferences, and they have contracted with certain NGOs for service delivery in communities and to certain target populations. CARICOM, itself, and CARIFORUM,

have invited NGO participation in their preparatory workshops leading to the

definition of governments’ negotiating positions. In October/November 2001, a

civil society forum was sponsored by the region’s governments and organized by

the Secretariat of the Caribbean Community.

Non-state actors have been engaged in activities to relieve and eradicate

poverty, to satisfy needs of local communities seeking to improve education and

offer pre-school facilities, and to participate in effective health service delivery.

These activities would all benefit from a more structured approach incorporating

the “beneficiaries” and their organizations, as well as branches of decentralized

ministries and local government. 

Local Government Renewal and Non-State Sectors 

in a New Governance System

Numerous NGOs have appeared in the Anglophone Caribbean. Nevertheless, they do not, and must not be allowed to, supersede the role and function of

local government, especially of a new local governance. More importantly, this

does not mean the state relinquishes overall responsibility for social welfare and

development. What is needed is not a decomposition of the state’s authority and

power but its co-integration with local government and community organizations. The power and authority of the state must necessarily be diffused to new

Citizen Participation, Local Governance, Policy Framework 39
centres of action closer to beneficiaries. At all stages, people in localities must

participate meaningfully.

The state remains central because none of these organizations can, even

with the most extensive and intensive capacity-building, be the agency through

which the contradictions of planned change and induced development are primarily or ultimately addressed. It is in their interrelationship and shared, though

not necessarily equal, responsibility, within the framework of a new system of

governance, that a new synergy will be released producing better economic, environmental and social development as well as better government. This is what

will give true and sustaining voice to people in localities. 

Going beyond the competition model, state, local government and nonstate organizations must of necessity collaborate. The inadequacies and inappropriateness of the one are often delicately offset by the strengths of the others.

NGOs may be seen, Sheldon Annis (1987) noted, as positive attributes—smallscale, politically independent, low cost, and innovative. These features, however,

do not give them a sustainable capacity to address pervasive poverty and dispossession. They are unable to offer a sustained and integrated assault, lacking institutional and financial connectedness to central government, and lacking a general base rooted in representative elections. NGOs, however, have a direct

legitimate basis, especially grassroots organizations, through their activities.

Their experiences, shared with national and local decision-makers, provide lessons vital to development interventions. International donor agencies are rapidly learning this. 

The same points can be made regarding NGO/government relations and relations of the two with local government and other non-state actors. Central

government lends itself to macro studies, NGOs to micro studies and local government lends itself to neither in particular. Local government’s location between community and nation leaves it well placed to bring civil society and central government together in productive relationships. It has to be ensured that

well-planned decentralizing, devolving and democratizing exercises are designed

with the full participation of these three groups. In addition, labour and business

organizations should be included. Sufficient resources are needed to enable local

government, NGOs and CBOs to meet local needs for poverty reduction and economic and social development. An equitable, budget-based way would be to assign specific proportions of national revenue for rural development.

The exercise of political will in favour of the maximum degree of participation at all appropriate levels is crucial. In the prevailing culture, central government’s leadership in initiating and legitimizing the dialogue is necessary in order

to achieve real results. The ethos embraces all the canons of good governance.

Governments, local governments, NGOs, business and trade unions must be

clear on the strategy and mission to which they are committed. National consensus has to be sought through the initiating and organizational action of governments, though the actual process must not be state-directed. 

Commentary

No Caribbean government, as yet, has accepted the critical assumptions of a

holistic strategy that it can undertake as policy to restructure societal power relationships and that centralized bureaucracies can learn to share power with community groups. There have been many discussions, and in Trinidad, there has

been some legislative action in relation to decentralization. In Jamaica, also,

40 Building Democracy from the Grassroots
there has been concerted effort to seriously restructure local government but

legal authorization and implementation has been excruciatingly slow. 

What is needed is a development policy for crisis regions in countries to go

well beyond the provision of emergency aid or niche economy. A new economic

system for the future constitutes the Third Sector of the economy. This sector

distinguishes itself as much as from the traditional market economy as from the

state-directed economy. It would be designed to achieve what traditional concepts of economic policy have not, since they merely “refurbish” individual

parts at the cost of the whole. A change of perspective is required, and this must

involve five elements: a new economic dimension, social investment, employment, adjacent markets and sustainable development. These points made by Karl

Birkholzer are relevant to the Caribbean; they explain why a significant role in

giving voice to people in localities is assigned to a revitalized and refashioned

local government system with a strongly enhanced civil society component. 

As Birkholzer has stated, paradoxically, crisis regions reveal no lack of work,

despite the prevalent high unemployment figures. Consequently the objective of

labour market policies must be to finance the necessary work, instead of financing unemployment. Long-term joblessness has been provided for neither in the

principle of unemployment insurance nor in the traditional tools of job creation

policies. Long-term unemployment is, on the contrary, an inadequacy of the economic system itself, not of the individual affected. 

None of this is truly possible without non-state actors working with the state

and local government. The key to the achievement of a third economic sector is

obviously a renewed and vitalized local government as a pillar in a new structure

of community governance. By its elected representativeness, its legal and constitutional status, its status as a corporate entity, its connection with central government through accountable and transparent financial arrangements, and its

explicit performance of the role of a developmentalist organization, local government becomes at the level of communities the primary official institution invested with the authority and power to act in the collective interests of those residing within the delimited region.

It is therefore vital that radical and urgent reform of the local government

system be undertaken within the framework of a new system of governance,

with the equally urgent responsibility of strengthening other civil society institutions within a legislated national framework of participation. Much has to

change immediately if we are to face the globalization and regionalization challenges confronting the Anglophone Caribbean. 

There is acceptance of the ideology of good governance, yet there is little action on its practices. This would require the perception of Caribbean bureaucracies as complex decentralized matrix structures with permanent mechanisms for

vertical and lateral integration, and a mix of generalist and specialist skills far beyond the present capabilities.

The variety of ad hoc coordinating mechanisms emerging have not been extensive enough and the need is for permanent coordinating mechanisms at all

levels intended to facilitate joint problem-solving. The communications channels, linking central government, local government and community groupings,

have been dominated by a top-down flow. The requirement is for a continuous

formal and informal, two-way, vertical and horizontal communication through

multiple channels. The locus of initiative and control must involve all stakeholders in various co-arrangements. Similarly, planning and implementation are to

be continuous and interactive. 

Citizen Participation, Local Governance, Policy Framework 41
The requirements for the holistic approach as manifested in changed attitudes of central governments are a long way from achievement in the

Caribbean. However, it is also a development for which Caribbean local government and non-state organizations have been increasing their capacity for interventions at the policy levels, nationally, regionally and internationally. Central

governments are, increasingly, under pressure from a changed global political

economy and the little revolts of civil society, committing themselves to reformed governance, participation and democratization. Continued pressure from

all quarters is expected to produce more positive results in the near future. 

For a new system of governance to work, people must be ready for interdependent action. They must become proactive in defining what this may mean

and how they will participate. All institutions in society must reflect a new governance structure—the public sector, trade unions, businesses, churches, the judicial system, schools, local government, community-based organizations. 

The political party, especially, must reflect all features it will naturally adopt

should it be given the chance to be the government. In these ways, a new synergy will be released producing inventiveness, increased productivity, greater

happiness of the greatest number and new, fully legitimate leaders. 

Conclusion

The international trend, under the new liberalism, is for “small” government

and a governance system appropriate for promoting this notion. Taking a futuristic view, two possibilities seemed interesting. One is that the world would continue to be dominated by capitalist markets and its systems requirements. Under

this view, liberalism as a multiparty political framework of constitutional rule and

limited government, would continue with interests competing for state favour.

The second possibility is of a world in which capitalism would be in a secular decline providing opportunities for a new coalition of forces (women’s groups, environmentalists, generation-based groups, among others) acquiring organizational

form to challenge successfully liberalism and establish a new plural politics. 

Taking either view, it is evident that old ways of governing in the Anglophone Caribbean have come under further serious challenge in the global context. The peculiar problems and vulnerabilities resulting from a small size, makes

it even more futile not to attempt to make democracy more participatory. A radically restructured relationship between central government, a new local government and civil society seems necessary. The achievement of this was shown to be

problematic yet possible and would be supported by a “third economics” related

to crisis regions/localities. 

N.B. Most of these points are to be found in a more expanded format and in

greater detail in Voice, Participation and Governance in a Changing Environment: The

Case of the Eastern Caribbean, CGCED, June 2000. [Professor Duncan’s other references will be furnished on request.—ED.]

42 Building Democracy from the Grassroots
T his study, commissioned by the Inter-American Foundation, examines the

experiences of selected intersectoral partnerships (ISPs) in Latin America.

Through a thorough analysis of 12 cases, the authors hoped to uncover

new insights related to three questions: 

• What are the benefits and challenges that emerge when local governments, businesses and nongovernmental organizations (NGOs) join forces

to bring about sustainable improvements in the lives of the poor?

• What can partners do to maximize the benefits and minimize the costs of

such intersectoral partnering?

• What is “best practice” for funding entities that wish to promote productive partnering? 

The partnerships studied included NGOs and local government (typically

municipal). In some cases, private sector businesses, government agencies and

community-based nonprofit organizations also participated as partners in grassroots-level development efforts analyzed.

Function versus Structure

This research represents a departure from much of the existing literature on

partnership, because it focuses on partnership functions and outcomes, rather

than structural typologies. One of the earliest findings to emerge from the field

research was that the partnerships generally did not have formal hierarchical

structures or legal agreements that clearly defined roles and responsibilities. Instead, the partnerships studied were flexible, evolving arrangements allowing

partners to draw on one another’s complementary skills so each partner could

optimize its contribution to the common goal. 

This flexibility was a product of strong trust among partners. Indeed, it was

trust that ensured accountability in these cases. Many partners opined that written contracts would be evidence of a weak partnership, evidence that partners

did not trust each other or were not yet confident of each other’s commitment.

Projects that involved the administration of development funds were, however,

the major exception to this pattern of flexible informality. Funding commitments and credit agreements were characterized by written documentation. 

Despite the absence of formal structural agreements among all partners, we

found several examples of bilateral agreements among subsets of partners. Such

agreements were most often present in situations where one partner had committed to providing a specific service (often training) for another. Although the

43

How Governments, Corporations and

NGOs Partner to Support Sustainable

Development in Latin America

By BERYL LEVINGER
partners interviewed did not identify structural elements as prerequisites to successful partnering, they did emphasize the importance of common goals and

trust, as well as complementarity of skills, resources and constituencies. 

A New Partnership Model

The emphasis on partnership functions (as opposed to structure) led to a

new conceptual model of intersectoral partnership, one that emphasizes the following key domains of partnership activity:

• Service delivery. Social and economic activities undertaken at the grassroots level with the full participation of the poor. The aim of these activities is to achieve sustainable improvements in the quality of life for impoverished people.

• Human resource development. Activities that generally focus on building

the skills of disadvantaged people and/or personnel in organizations that

partner with the poor. 

• Resource mobilization. Activities undertaken for the purpose of securing

the financial and technical support required to carry out projects and related functions.

• Research and innovation. Activities that help local people and the development practitioners who work alongside them to test or assess new ways

of responding to priority needs and problems. 

• Public information, education and advocacy. These activities generally

build upon research and field-based experience with service delivery and

often entail policy-oriented advocacy. 

Most of the partnerships studied originated as a single NGO engaged in service delivery. Eventually, that NGO went on to engage new actors from other sectors (e.g. community-based organizations, or CBOs, local government, and corporations). As these new partners became involved in the development project, the

initial service delivery orientation expanded to incorporate new activity domains.

Stages of Partnership

The partnerships studied did not exhibit discrete sequential partnership

phases. Instead, they followed a fluid and iterative process of evolution. Four

basic stages of partnering were observed. However, not every partnership went

through each of the four stages and the sequence of the stages varied among the

partnerships analyzed. The stages observed were the following:

• Potential partnership. The actors are aware of each other, but have not

yet begun to work together routinely and in a close fashion.

• Nascent partnership. The actors are partnering, but the partnership’s efficiency is not optimized.

• Complementary partnership. The partners are predominantly working in

the same domain, but, because their skills, constituencies or resources are

complementary, the impact of their work is substantially increased. 

• Synergistic partnership. The partners are working in all or most of the five

domains and, consequently, they are able to achieve substantial impact on

complex, systemic development problems. 

At any given stage, a partnership may evolve to any of the other stages.

Local circumstances and partner experiences are the two factors that determine

44 Building Democracy from the Grassroots
both the sequence and number of stages in a partnership’s life. Ideally, each new

iteration of the partnership brings the actors closer to their common goal. Nevertheless, it is important to note that no single stage is inherently better than any

other. Rather, what determines a stage’s “fit” is the degree to which it fulfills the

goals of the partners at a particular point in time. Sometimes a complementary

partnership is most appropriate to the needs of the actors and their goals. In

other cases, a synergistic partnership is the preferred response. In some situations, a partnership has achieved its objectives and is no longer needed. However, the successful partnership experience has strengthened the bonds among

actors who now stand ready to reconvene when the next partnership-worthy development challenge arises. But, in this interim, relations among the partners

can best be described as nascent or potential (depending on the extent of their

ongoing activities during this “quiet period”).

One of the important lessons from our study is that intersectoral partnership

(i.e., partnerships that involve actors from local government, NGOs and business) is not easy. Building and maintaining relationships, especially among diverse organizations, is time-consuming. In some cases, single-sector partnership

or business philanthropy may be sufficient and even more cost-effective than intersectoral partnering. 

Benefits of Intersectoral Partnership: the “Three C’s”

The benefits of partnership derive from complementarity and synergy

among partners. Partnership can enhance project impact by fostering the

following benefits:

• Continuity. Beneficiaries are able to access resources in the community to

maintain or build on the impact of a project after its completion. Thus,

the progress achieved as the result of an initial intervention is continued

and expanded. When a partner builds on progress achieved through an

earlier development activity, we can then say this actor has achieved continuity.

• Comprehensiveness. Multiple activities of the partnership, either in a single domain or across domains, reinforce the benefits of the project by addressing complex, entrenched issues from many angles simultaneously.

• Coordination. Awareness of and collaboration with other development actors in the community allow partners to achieve greater coverage and take

advantage of economies of scale.

These “Three C’s” enhance the impact on beneficiaries of program and projects conducted under the auspices of intersectoral partnerships. In addition to

the rewards associated with enhanced impact, partnering organizations also benefit from increased social capital. Working with other organizations builds and

strengthens the network of informal relationships and trust that brings organizations together to take action.

Benefits of Intersectoral Partnership: Risk Mitigation

One of the most important benefits of intersectoral partnerships is that such

arrangements mitigate the risks threatening the success of development projects,

particularly those with ambitious goals. Such “risk mitigation” is an outgrowth

of the diverse skills, approaches and spheres of influence represented in an effective intersectoral partnership. Actors, by virtue of their diversity, are well posiHow Governments, Corporations and NGOs Partner 45
tioned to respond to the multiple internal (design) weaknesses and external

(contextual) threats that often thwart the achievement of project goals. When

partners present a wide range of skills and resources, projects are able to respond

in an agile fashion as problems arise. 

Optimizing Partnership Benefits: Maintaining Diversity

Contrary to much of the conventional wisdom on partnerships, the benefits

of working together do not derive from a blending or blurring of organizational

identities. Indeed, it is important that organizations maintain their distinctiveness and unique perspectives for it is through such differentiation that partners

are best situated to reduce or eliminate the diverse threats—both internal and

external—that projects face. In effect, differences among partners become a riskhedging strategy. While diverse opinions and viewpoints among partners can

cause conflict, they can also lead to innovation, creativity and new insights. Ideally, working together allows partners to understand and respect each other, but

not to become each other. 

Optimizing Partnership Benefits: Principles of Productive

Partnering

Based on the field research and analysis, we offer the following suggestions

to members of intersectoral partnerships and to organizations that wish to support such partnering:

• Principle 1: Keep your eye on the goal. Focus on the desired impact of the

partnership, rather than its structure. Make sure goals and objectives are

explicit and agreed-upon by all partners. Then, allow structures and relationships to evolve in response to the goal and the progress made in

achieving it.

• Principle 2: To thine own self be true. Allow organizations to share their

own talents and specialize in what they do best. Maintain, to the extent

manageable, differences in outlook and approaches among partners to reduce internal and external threats to development efforts. Identify areas of

expertise to maximize complementarity. When necessary skills are lacking,

use partnership to build capacity in new organizations.

• Principle 3: Cast a wide net. Build awareness of other actors in the environment to make it easier to draw on the necessary skills when a partnership opportunity comes along.

• Principle 4: Use partnership to mitigate risk. Pay attention to potential

threats and ways in which partner diversity can reduce threats to project

success.

• Principle 5: Don’t forget philanthropy! Not all situations call for the same

type of partnership—or for partnership at all. Do not rule out any particular role or strategy ahead of time. In some instances, philanthropy (i.e., a

grant to an appropriate NGO) may be a more appropriate business response to a particular challenge than a partnership arrangement.

The above is an excerpt from Dr. Levinger’s book on partnerships to be published

by the Inter-American Foundation. An article on her findings will appear in the next

issue of Grassroots Development, the Foundation’s journal.—ED.

46 Building Democracy from the Grassroots
Among the laws that rule human societies there is one which seems to be more

precise and clear than all the others. If men are to remain civilized or to become so, the art of associating together must grow and improve in the same

ratio in which equality of conditions is increased.

—Alexis de Tocqueville, Democracy in America

T he Inter American Foundation has been supporting community-level development initiatives in Latin America and the Caribbean since 1971,longer than any other major donor. Development thinking has evolved

over the last few years from a strictly economic approach to a sharper focus on

the civic connectedness within communities and nations. It hypothesizes that

this capacity to concert, particularly at the local level, translates into trustworthy

public institutions on which economic action and public life in general shall be

reliably based. 

The IAF decided it needed to ascertain whether its style of support helped

build this civic connectedness and how. It commissioned an overview of how

eight selected initiatives contributed to the civic fabric of the communities in

which they were inserted, and how each might have been assisted to better fulfill this role. 

The findings confirm civic connectedness grows organically via the action of

communities themselves; it cannot be built from outside. However, it can be fostered by facilitating the conversation whereby communities learn to identify

their shared needs, to plan strategies to address them and to carry out their

plans. Yet development assistance programs may in fact discourage this conversation by pushing prematurely for the presentation of projects and even advancing solutions to problems not yet formulated. Donors might wish to focus more

on communities and less on projects, rely less on strategic plans and more on capability to respond, emphasize funding less and advisory and networking support more, support only projects that advance broader processes, accompany

communities over time even when not funding them, and encourage communities to slow down and reconsider rather than urge them to formulate, conclude

and report.

A People’s Capacity to Concert

Repeated observation of human interactions in dealing with issues, particularly contentious issues, reveals a general phased pattern. We can analyze the

47

All of the Voices

By RAMÓN E. DAUBON
evolution of this interaction in five recognizable phases1 that, like the colors of

the spectrum, evanesce from one into the next. The movement along these

phases, as occurs in all human interactions, can be fluid and oscillating, advancing and retreating and sometimes still. Progress toward the goal of concerted,

sustainable action is achieved at each passing. The phases, discussed at length

below, are the following:

• coming together around a concern;

• naming and assuming ownership of the real problem;

• identifying and weighing possible courses of action;

• designing a plan and inviting expert assistance;

• implementing, evaluating and, possibly, recasting.

Communities with capacities to engage effectively and wholly through these

phases are likelier to produce and implement solutions that will be sustained.

Moreover, evidence suggests communities learn and perfect the process of such

conversations by actually engaging in them.2 Conceptually, the process achieves

two things. First it invites communities to devote time and attention to apparently meritorious issues. Second, the community members hone their capacity

to deal with such issues and, more importantly, to manage relationships outside

their circle of confidants. 

This is critically important. As a survival mechanism, humans bond instinctively in circles of trust governed by clear norms. These norms evolve, of course;

cultural change is in great part the evolution of such norms. However, the need

to survive under precarious conditions tends to harden the norms, making evolution more difficult. Also, under threatening conditions the norms inside the

circle tend to emphasize exclusion. This is the common behavior of immigrant

groups, who, as defense mechanisms, discourage friendships and marriage outside the community. Issues are dealt with inside the close-knit community,

where adherence and loyalty are rewarded. This works as a survival mechanism,

but is severely limiting as a space for economic advancement.

Some societies can retain, but transcend, the close-knit circle. Engaging with

other communities outside the circle of personal loyalty and trust appears indispensable for economic advancement.3 To deal with strangers, citizens must come

up with new rules of relational behavior, new covenants based on trust in the institution rather than on group loyalty. This is what sociologist Max Weber called

“trust based on the institutional role people inhabit versus trust based on personal familiarity.”4 Such broad covenants, sometimes referred to as “civic behavior,” allow society-wide institutions to operate. In that regard, Nobel laureate

Douglass North stated the following:

Learning to trust the behavior of strangers may be the greatest challenge to

social and economic development; the major historical obstacle to economic

growth has been the inability of societies to move from personal to impersonal exchange.5

48 Building Democracy from the Grassroots

1 The insight of the phased conversation was first expressed by Harold Saunders in A Public Peace

Process: Sustained Dialogue to Transform Racial and Ethnic Conflict, St. Martin’s Press, New York, 1999. 2 For a recent reference see Falk, Ian and Lesley Harrison, “Indicators of Social Capital as the

Product of Local Interactive Learning Processes,” Centre for Research and Learning in Regional Australia, Paper D4/1998 in the CRLRA Discussion Series, the World Bank, 1998. 3 This argument has received great attention since the appearance of Francis Fukuyama’s work,

Trust: The Social Virtues and the Creation of Prosperity, The Free Press, 1995. 4 Cited in Linda Perlstein, “Suspicious Minds,” The Washington Post Magazine (July 22, 2001). 5 North, Douglas C., “Economic Performance Through Time: The Limits to Knowledge,” Working

Paper, Washington University, St. Louis, 1997 (p. 19).
Engaging in such community conversations develops the capacity to create

these broader covenants on which development is based. It happens normally

in phases.

First Phase: Coming Together Around a Concern

Some degree of collective action to address a shared concern is common in

all human groups, particularly in response to a crisis. It has also been documented that a community’s capacity to come to understandings for such shared

action, its capacity to concert, will make a critical difference in its capacity to deal

with all issues, and hence in its economic and social success.6 Of particular importance is how human groups develop the covenants, the civic cohesion or social capital, that would allow construction of trustworthy public institutions

and, hence, the capacity to transact with strangers. 

Fukuyama7 affirms, “The systematic study of how order and thus social capital can emerge in a spontaneous and decentralized fashion is one of the most

important intellectual developments of the late 20th century.” Sachs8 argues however that the evolution toward this “order and social capital,” this culture of values and practices that are conducive to economic development, is not automatic. Crises and natural disasters trigger collective action, but the effects tend

to be short-lived once the crisis abates. Considering more lasting alternatives,

Huntington9 speculates whether political leadership can substitute for disaster as

a catalyst for trustworthy public institutions. He concludes that too is unreliable

in the long run since in the absence of public covenants the institutions will not

outlive the person of the leader. Susskind and Zion10 then point to the need for

public conversations to build such covenants, and emphasize the prerequisite of

a constructed consensus—presumably built with time and effort via a facilitated

dialogue—rather than a one-shot majority expression. They argue such a dialogue must include all the voices of the community, operate through transparent, participatory rules, actively seek to discover the common interests, and be

geared to eventual action. 

It seems clear that only a concerted conversation will produce the social capital that will foster development. The question for aid donors, then, is how to

get that facilitated conversation going in the first place. Donors have increasingly relied on local intermediary organizations as effective lenses for communities’ needs and as providers of technical services. Evidence now suggests11 that,

properly trained, intermediaries can be catalysts for these civic conversations.

Donors might wish to consider casting intermediaries in this new light, as well

as their own interventions and whole programs, devolving to their target populations authority to concert and design development initiatives autonomously.

All of the Voices 49

6 For a general presentation of this argument see Daubon, Ramon E. and Harold H. Saunders, A

Citizen’s Political Process to Enhance Civic Life for Communities’Economic Development, Kettering Foundation, 2001. 7 Francis Fukuyama. “Social Capital” in Harrison, Lawrence E. and Samuel P. Huntington (eds.),

Culture Matters: How Values Shape Human Progress, Basic Books, 2000 (p.103). 8 Op.cit.

9 Samuel P. Huntington, “Cultures Count,” in Harrison and Huntington (eds.), op.cit. (p. xiii). 10 Susskind, Lawrence and Liora Zion, “Strengthening the Democratic Process in the United States:

an Examination of Recent Experiments,” Draft Working Paper, The Consensus Building Institute,

Cambridge MA, March 2001. 11 See Group Research Work Group, “Pathways to Citizen Engagement,” Kettering Foundation

2001; Susskind and Zion (op.cit.); Huntington (op.cit); Fukuyama, in Harrison and Huntington

(op.cit); and Sachs (op.cit.).
Donors must relinquish the power to plan the development of others. Ultimately, development is about the internal capacity to identify one’s own problems and carry out one’s own solutions. Local governance and the context of

local government and local civil society provide the ideal laboratory to test and

develop this thesis.

Except in controlled experimental conditions, donors are unlikely to come

across communities on the verge of initiating such a dialogue. Even local intermediary organizations with good knowledge of their home turf will run into such

communities probably only after they are far along in their conversation. The

challenge to intermediaries and donors is to encourage communities to return to

invest the necessary time and effort in arriving at the formulation of projects. Ideally, donors would support local intermediaries’ availability to communities

through this extended conversation. The structure of the conversation will revolve around a central core of a handful of initial instigators, plus a group of

maybe a dozen recruited adherents to represent as many voices in the community

as possible. These persons in turn rely on their intimate circle of trust as their eyes

and ears in the community. This group will commit to meeting regularly.

An important caveat, however, is the representativeness of the initial group.

On one hand, the conversation should reflect all voices in the community so the

formulation of the problem and the design of the solution reflect the values of

all. On the other, there might be engrained resistance to some voices for racial,

social or historical reasons. The catalysts and conveners would have to decide

whether to first be inclusive and then proceed to propose a separate conversation on that strained relationship with members of both groups12 or to proceed

without the excluded group. In the latter case, the group must be aware that the

problems and solutions proposed will lack the viewpoint of the missing voice,

and a recasting of the problem might be necessary when the community is ready

to come together.

A critical consideration is the useful role of actors from outside the community. While ownership of the conversation must always remain with the community, a passive outside actor, such as an intermediary service organization, can

provide the “glue” holding conversation together.13 First of all, the outside agent

can be the initial instigator or catalyst of the process, although providing the underlying conditions is never solely the result of such an outside intervention.

Still, even after enough community members come to realize “something” needs

be done about an issue, without a catalytic spark they may not move to conduct

fact-finding, identify the leavening agents, and inject ideas on the process and

its relationship to economic development.

The outside agent serves as the connector that brings different groups together and helps create the space for such an ongoing interaction. The role can

take the form of facilitator, if the conversation lags, or moderator, if it becomes

too intense. A respected outside party can also serve to legitimize the process and

its actors in the eyes of the official structures, of international donors and of

other community members who might initially have misgivings. The external

agent can be a continuing trainer (or procurer of training) as the conversation

moves along. Finally, the outside agent must remain a neutral monitor of the

process itself and of the success of its implementation.

50 Building Democracy from the Grassroots

12 The mechanism of the “sustained dialogue” facilitates this very difficult conversation under

conditions of even severe stress. See Saunders (op.cit.). 13 From Randa M. Slim, Report on the Economic Development Committees—Tajikistan 2001. Slim and

Associates, Dayton OH, June 2001.
Phase Two: Naming and Owning the “Real” Problem

This is a trying phase in which parties to the dialogue group try to focus on

the fundamental problem. The initial reason for coming together is a shared but

unspecific concern. The purpose of this phase is to forego the temptation to act

immediately by attacking the visible symptom, and, instead, try to discover the

root problem, which is more likely lead to a sustainable solution. The conversation may begin as restrained, but, once the group begins digging, may give way

to recrimination, even accusations. This stage could last several sessions. Depending on the sensitivity of the conversation, group members will consult with

family and trusted associates about the problem and its underlying causes. At

times, the group may seem to progress only to revert to accusations as the search

for the root problem deepens. 

The range of choices as to the way the group goes about naming the problem depends on the level of the underlying animosities. At one end of the spectrum is the systematic naming exercise familiar to those who have practiced deliberative dialogue in some form.14 Participants constructively manage their

differing interpretations of the problem and are able to come up with a consensus definition. At the other end of the spectrum is an exchange in which animosities are so intense that participants must vent their anger, grievances and

concerns before they can crystallize a priority problem. A process of sustained dialogue can manage such a conversation.15 Somewhere in the middle is a group

that can come together around an identified problem and begin work while realizing the need to probe more deeply and redefine it. This allows the group to

garner a sense of action and begin to do something, even while realizing that it

may have to revisit the definition of the problem. Most communities will fall in

this middle range. It is hoped that as they tackle problems they will learn about

interacting and the value of shared work, and will be willing to come back later

to deal with the problem at a deeper level. This is how these shared covenants,

this social capital, are built. By one route or another, the group will arrive at an

understanding and naming of “the” problem. Inevitably it will ask, “So what do

we do?” That “we” is critical. Now the problem is not one which one group accuses another of causing, but one they all share.

Phase Three: Identifying and Weighing Possible Courses

of Action

With a clear idea of the problem, the group can begin to focus on a response. The timing of individual steps depends on how long the dialogue group

needs to talk within itself to identify possible directions before engaging the

broader community. 

To ascertain alternative approaches for dealing with the problem, the dialogue group may rely on relevant existing “issue books,” such as those developed

by the Kettering Foundation16 for deliberative forums in the U.S. or by the InterAmerican Democracy Network in Latin America.17 More likely, it may want to do

its own “framing” of the public issue. All of this work can be done within the

group or can involve others. If relationships within the dialogue group remain

All of the Voices 51

14 See, for example, David Mathews, Politics for People, Kettering Foundation (2nd edition), 1998. 15 See Saunders (op.cit.). 16 See David Mathews (op. cit.). 17 See www.RedInter.org. 
tense, the group may choose to use these analytical processes within the group

until it is confident engaging the public will be constructive. When the group is

ready to reach out to the community, this framing of alternative approaches can

be developed and tested beyond the dialogue group, be it with associates or with

ad hoc focus groups. 

Training will likely be needed for the framing exercise as well as for moderating and monitoring the follow-up community forums. This is available from a

number of sources and through variety of methods the intermediary organization

can help identify.18 Each deliberative method has special strengths depending on

the community’s characteristics and the time and effort allocated to the broader

conversation. The broad community meetings should be held as often as feasible

and the results of those conversations should be documented and brought back

to the dialogue group. They provide the kernels of consensus around which a

sense of direction is built. The presentation of alternative directions should identify the tradeoffs among the options, and these should be based on competing

values (for example justice, expediency or compassion, if the issue is crime).

There is no “perfect” solution and the community has to discover its own path

based on its own weighing of competing values. It is not yet a technical decision.

This is also why expert help should not be involved at this stage.

Once a sense of direction is gleaned from the conversations with the broader

community, the dialogue group can set out to formulate a plan of action. Before

outside resources are considered, however, the community would do well to survey its own resources and be willing to draw first from them. Sustained development is mainly about self-reliance. A sense of the resources available will require

involving the group of trusted associates in an assessment of the community’s

civic assets and weaknesses. The strengths should be the cornerstone of the future plan and the weaknesses should be addressed.

Phase Four: Designing a Plan and Inviting Expert

Assistance

Once the direction for action is agreed upon, the construction of an action

plan offers an opportunity—indeed, the necessity—to devise ways of bringing

the community together around dealing with the problem. Several things are

critical. First, it is worth repeating, the plan should capitalize on the community’s civic strengths—the capacity of citizens to act in a public way—and try to

address the weaknesses. Second, the design of the plan should also involve business and government actors, for example, via partnership arrangements. These

voices would ideally have been present—albeit as private voices—from the beginning, and their resources should be an important component of the plan.

Third, all of the community’s various voices should be heard in the process.

Fourth, the plan should be sequential and interactive, with care taken to identify

steps to be taken first and impact on others, and designate the parties responsible for each step. Fifth, the plan should include an ongoing evaluation of

progress, as well as mechanisms for orderly mid-course corrections. And sixth,

the community should be consulted again before implementation is attempted;

it is paramount that it be seen as the community’s plan. 

52 Building Democracy from the Grassroots

18 For example, information on National Issue Forums and on Sustained Dialogues can be obtained from www.Kettering.org; on Study Circles from www.studycircles.org; and on the Open Spaces

methodology from www.openspaces.org.
The design of the plan may require some expert help, from help in assembling public-private partnerships to help in processes of planning and evaluation. Moreover the process of consultation with the community should be extensive and may be drawn-out. This consultation and study may mandate

modifications to the plan, but this will enhance the community’s sense of ownership and fire-test the plan, thus improving its quality.

Phase Five: Implementing, Evaluating and—Possibly—

Recasting

Implementation of the plan will follow once the who, what and when have

been ascertained. Given the pioneering and broad participatory nature of this effort, a constant sense of “how we are doing” is necessary, for which parties to the

dialogue group may rely partly on their circle of trusted associates. The dialogue

should internalize continued feedback and determine whether midcourse corrections are necessary. Moreover, it should probe to ascertain whether an underlying, unresolved issue impedes implementation. If so, the dialogue group should

be open to returning to previous phases of the conversation: 

• Is the plan formulated to take us in the direction we determined we

wanted, relying on the community’s own resources as much as possible,

and in a logical sequence of steps? (Return to Phase Four.) 

• Are we still sure this is the direction in which we wish to go? Have we discovered a choice that was not considered the first time around? (Return to

Phase Three.)

• Did we really identify the underlying problem, or are we dealing with a

symptom which will be unresolved until the underlying cause is addressed? (Return to Phase Two.)

• Were some voices left out of the initial conversation, without which the

problem cannot be precisely defined, much less resolved? (Return to Phase

One.)

This citizens’ political process may never end; a community—like a person—

is always engaged in improving itself. But as the dialogue group goes through

each cycle it matures. It will have confronted some of its underlying conflicts,

engaged in joint efforts notwithstanding and accomplished measurable results,

considered its failings and corrected direction as a consequence, opened its actions to public scrutiny, and fed the findings of that scrutiny back into its own

processes. And as the dialogue group consults with associates and engages the

broader community in deliberation, evaluation and study, this maturation spills

out and spreads. This frustratingly slow, often painful labor is the distillate of

public capital. What remains after this process will be strictly authentic and effective beyond criticism. These norms of relating, these shared covenants, are

the essence of democratic society and the bedrock of prosperity.19

... And Now to the Real World

In preparation for this study, I surveyed IAF’s program officers for recommendations as to projects that would best highlight the Foundation’s capacity to

tap the democratic potential of its grantee communities. Of some 20 projects

All of the Voices 53

19 See Daubón and Saunders (op.cit.).
identified, eight were selected: three in Mexico and one each in Guatemala, El

Salvador, Costa Rica, Ecuador and Brazil. Rather than focus on the project as financed by the Foundation, I preferred the target community as the unit of

analysis. After all, development assistance is about communities. All of the communities were undergoing a general process as described in this paper. All had

convened around a concern, focused on a specific addressable problem, identified a strategy to deal with it, designed a project, and carried it out. All had hurried through the convening, naming and direction stages to reach the project

design stage. The temptation of possible funding is just too great to delay. All

could therefore benefit from some breathing room to revisit these phases of the

conversation. The conclusions, below, address what each may have missed and

what each stands to gain by strengthening this capacity to concert. 

[Of the eight projects Dr. Daubón studied, four are included in this publication.—ED.]

Conversations and Coca-Cola in a Salvadoran Town

Nejapa is not one but four processes. After the terrible civil war in El Salvador officially ended, the harder task of constructing the peace began. Not only

was the country physically devastated but, as happens after such fratricidal wars,

wounds and hatreds hindered reconstruction of the national fiber. Within the

peace process, El Salvador rode the hemisphere’s waves of privatization, decentralization, empowerment of the local level via resource devolutions and

strengthening of civil society organizations to complement the effort of local

government. As elsewhere, in El Salvador the trend also saw the creation of a

government-funded “social interest fund” which, although often manipulated

for partisan purposes, did generalize the practice of thinking about exclusively

local initiatives. 

This set the stage for Nejapa, a small town on the far outskirts of San Salvador and fortunate in several respects. A leftist stronghold during the war, it

had escaped the physical damage inflicted on other towns farther out. But its relative safety drew a flood of refugees. As the war ended and former guerrillas were

legitimized as a political party, Nejapa adhered and elected a leftist mayor. To

deal with the issue of refugee housing, he actively sought collaboration from all

segments of the community, including former antagonists. This speeded the

healing process; it also became the first of Nejapa’s four civic processes.

Meanwhile a group of community activists distrustful of partisan politics

began to form the area’s more than 50 organizations into a civic association to

attend to Nejapa’s many economic problems. Unable to qualify legally as a taxexempt NGO, the group opted for the more general status of trade association

and called itself Asociación de Concertación para el Desarrollo de Nejapa

(ACDN). Regardless, it aimed to set the community on its own development

path. ACDN was Nejapa’s second process.

At the same time, two of San Salvador’s largest businesses, Nejapa Power, a

privatized local power company, and EMBOSALVA, the local Coca-Cola bottler,

were looking for an industrial site with reliable access to potable water. Nejapa

sits on one of the country’s best sources of underground water, and both companies approached City Hall looking for a deal. Given the initially cool reception,

company management sought to garner broader support directly among the

community: Nejapa’s third civic process.

54 Building Democracy from the Grassroots
Finally, the Fundación para el Desarrollo de El Salvador (FUNDE), the country’s premier social science research organization which had a previous relationship with the IAF, and the Fundacion Salvadoreña de Apoyo Integral (FUSAI), its

most seasoned development intermediary NGO, were actively seeking a role in

reconstructing the peace. In their search they stumbled upon Nejapa and its

three parallel processes. Inspired by FUNDE’s thinking, FUSAI, Nejapa’s fourth

civic process, was the catalyst that brought it all together.

Everything happened in stages. The municipal government and the two

businesses, after coming to an understanding, were ready to engage in a partnership that would guarantee water to the industrial plants in exchange for their

support for municipally-sponsored housing and micro-business programs. Meanwhile, the ACDN had approached the IAF for a loan fund to match a government challenge program for small business development, but had been alerted

by environmental groups about the potential danger to Nejapa’s underground

water table posed by indiscriminate industrial pumping. This concern drew them

to City Hall, albeit first in protest. FUSAI, finally, had discovered ACDN and was

proposing to it a development partnership with City Hall.

Thus began the conversations that, in one of the most remarkable deliberations in the IAF’s experience, led to this four-part consortium. Several aspects of

the Nejapa experience are unique. First is the pragmatic nature of the Marxistbusiness partnership including the mayor, Coca-Cola and the privatized power

company. Their marriage of convenience around an environmentally hazardous

initiative—depleting the underground water supply—is not without irony. Curiously, this environmental threat brought the citizens’ association into the partnership, first in a threatening mood, spurred on by FUSAI and inspired by a master plan for a development model conceived at FUNDE. Most ironic is that

conceptualization on the governance of the partnership happened after the opportunity of a matching fund brought the partners together, placing the financial cart before the organizational horse. Regardless, and in spite of the lack of an

organizational culture to begin with (or perhaps because of it!), the likelihood of

the development fund created the critical resource mass and offered new space

for negotiation and concertation between the disparate parts. 

Regardless of the odds against it, the marriage has worked—because the civic

group had had the foresight to organize; because the Marxist mayor was looking

for help with a pressing housing situation (and to prove himself as a constructionist after the trauma of the war); because EMBOSALVA and Nejapa Power

needed water which compelled them to look for goodwill; because FUNDE had

focused on municipal partnerships as a development model; and because FUSAI

was seeking a place to try out the model.

The Fondo de Contrapartidas el Desarrollo Local de Nejapa was officially created

in April 1998 with funding from the two member businesses and the IAF. It is coadministered by FUSAI and open to new funding partners. The 36 communities

first attracted to the partnership have doubled to 72. The fund has dealt with issues of housing, reforestation, electrification, environmental studies, road and

recreational infrastructure, and training in civic participation and community

leadership development. An assembly of its founding partners and an appointed

executive committee governs it. General priorities and specific projects are decided by a two-thirds vote.

All of the Voices 55
ACDN, as the people’s representative in the governance structure, carries a

special democratic responsibility. Its discourse20 emphasizes the capacity to concert in its title. Within the partnership’s administration, ACDN, the only civic association is a conduit for public voices. While appreciating the difficulties involved in the mechanics and Director Antonio Orellana laments there is not

more concerting. So far, the projects endorsed by the partnership are quite impressive, but all have a patently “municipal” feel as activities a mayor with resources would undertake. There is little promotion of income-generating businesses, other than the public market building, again a typical municipal

undertaking in Latin America. One wonders what other issues a public deliberative process might uncover. As part of the commitment to “walk along” with this

effort, supporting donor organizations might consider a small civic investment

engaging a program of conversations throughout the communities in Nejapa. 

Centro Agricola Cantonal de Hojancha: Concerting in

Guanacaste

The history of Hojancha’s Centro Agricola Cantonal (CACH) dates from1978

and is interwoven with the history of the community. CACH first received IAF

support in 1981, for its credit and technical assistance programs, and is now one

of the most successful community development experiences in Costa Rica, with

325 active members in agricultural and related programs. CACH is governed by a

board of directors elected by its membership. Since 1985, CACH has received no

direct donor support and is fully funded via sales of services to domestic sources,

specifically through an 18 percent overhead charged for its services under government supported programs. Indirectly, CACH has benefited from USAID support to the government of Costa Rica for protection of forests and basins. This

support is now disappearing.

The small settlement of Hojancha was not even officially a town 20-some

years ago, and one of its first struggles was to incorporate so as to take advantage

of government forestry programs reserved for townships. Community-wide mobilization and effective advocacy in the national capital won Hojancha its township status more quickly than it was accorded to larger communities nearby. The

catalyst for this civic action was the local parish priest, a Spanish citizen, aided

by a band of energetic young professionals.

CACH was founded to take advantage of government extension programs

for diversifying the community’s economic base beyond coffee and cattle toward

forestry and other agricultural activities. The critical situation in Guanacaste

province, after subsidized beef prices fell, attracted the U.S.-based service intermediary ACCIÓN-AITEC and a “Diagnóstico Económico de la Peninsula de

Nicoya” which identified the need to diversify. The community mobilization

was built upon existing structures, especially a well-established coffee growers’

cooperative. It began in earnest after the apparent failure of government extension agents to deal directly with farmers and encouraged them to reforest. 

ACCIÓN then brought in the IAF for basic agricultural development support. A

second IAF grant supported forestry development and a forestry credit program

as well as a beekeeping and honey processing initiative. Other international support, including an Inter-American Development Bank loan, followed. Today

56 Building Democracy from the Grassroots

20 See Concertacion y alianzas para el desarrollo local: La experiencia del Fondo de Contrapartidas para el

Desarrollo Local de Nejapa, Fondo de Contrapartidas, Nejapa (December 2000).
CACH’s staff of 30 specialists provides services in forestry, cattle, coffee, legumes,

vegetables and beekeeping. 

Hojancha’s success deserves attention because its internal process was particularly difficult. While vying with other communities for township status, Hojancha seemed quite coherent and single-minded under the inspired leadership of

the parish priest. The process, however, diverged with the priest on one side and

CACH on the other. A deep sense of competition still pervades.

The Hojancha process is unique in several ways. For one, partisan politics

plays a more visible role here than in the other projects visited for this report.

The divide is not only along party lines but social, with an apparently populist

right wing constituency loyal to the priest, who has now created his own local

political party, and a progressive lower middle-class group working with CACH,

whose clients are small (averaging about 40 hectares) but not destitute landowners. From the beginning, the Hojancha process, in both streams, has emphasized

production over organization, which was possibly key to the situation. While

the initial convening was widespread, the effort was consumed with the immediate goal of township status and government forestry support program. The community organizing behind the thrust was taken for granted (particularly given

the strength of the previously existing cooperatives) and the focus on forestry

production as a new solution was never questioned. It was matter of designing a

better program and implementing it.

Also, CACH assumed a role as catalyst and facilitator beyond that of NGOs

in the other projects visited and more akin to the “internal” NGOs created in indigenous communities in Ecuador and Guatemala described elsewhere in this report. While those represented tightly knit communities ethnically defined, Hojancha was a looser community segregated by class and partisanship. Class

segregation, and the rivalry it spawned, might not have been as damaging without the partisan tinge—which unfortunately contaminated the local rivalry with

strains of the national partisan debate and made more difficult the construction

of community covenants. 

It also has the practical disadvantage of connecting local development with

local partisan infighting. Absent a culture of broad civic engagement (which neither half of the process here chose to cultivate) local partisanship becomes typically quite fierce. Partnerships and effective projects are then redefined with

every change of occupants at city hall and so never receive significant public

commitment. It would have been better for the two groups to remain initially

separated by class but also in terms of spheres of action. This would have left the

door open to a possible convergence in the future after the live-and-let-live period had exhausted the possibilities of either group. Guanacaste has considerable

growth potential in agriculture within Costa Rica, and in lumber and lumber

products for export.

But that seems unlikely in Hojancha. CACH is singularly effective as a development generator under difficult circumstances, albeit within its narrow constituency. A “clone” IAF project with a Comité Agricola Cantonal in neighboring

Andayure failed for economic reasons. But CACH will be restricted in its potential by its political scope. Partisanship is a zero-sum game, as politicians know.

Citizenship, on the other hand, is a game of discovering limitless possibilities.

The challenge to the community is what to do and who should do it. Currently,

no internal or external actor is available with the legitimacy to convene a

broader conversation. Meanwhile Hojancha’s considerable potential to go far beyond the confines of Guanacaste will remain unfulfilled. 

All of the Voices 57
A People’s Capitalist in the Sertão

Valente means “brave.” One has to be brave to survive, braver still to thrive,

in the Sertão, the arid vastness of Brazil’s Northeast where the municipality of Valente is located. Audacity probably helps too in this desolate and often forgotten

historical backwater of Bahia. “The Sertão contains everything that we need and

if something is missing, people will invent it,” is the motto of APAEB (Association of Small Agricultural Producers of the State of Bahia). Such bravado would

sound foolhardy, were it not for all APAEB has pulled off. 

Celebrating its 20th anniversary in 2001, this legion of dreamers and community organizers is one of the most successful grassroots development experiments in the IAF’s already exemplary catalogue. This designation is nothing

short of astounding. To earn it, APAEB focused on the one abundant agricultural

resource in the Sertão, the sisal plant, considered nearly worthless, and turned it

into the bedrock of an industrial conglomerate with sales exceeding $11 million,

more than 860 well-paid jobs, and over 1,500 participant beneficiary farmers in

52 communities in 15 municipalities in the region.

APAEB is governed by an 80-member general assembly, elected by its beneficiaries, and a 23-member board of directors that meets monthly to oversee business

matters. Although accountable to its members, APAEB sees itself primarily as a

service organization, meaning it makes industrial operations pay for the services

offered. The enterprises are indeed run with enlightened management—for example, professional development is amply encouraged and provided, which results

in a more enthusiastic, effective and productive workforce. APAEB competes favorably in wages and prices in all leagues; 70 percent of its output is exported to

established markets in Europe and North America. Operating 24 hours a day,

seven days a week with four staggered shifts of workers, it uses every ounce of its

capacity and is considering plans for expansion. APAEB makes money.

In addition to sisal, whose processing APAEP integrates vertically from the

time it leaves the farm in its initial shredded state to the finished exportable

product, the organization operates successful businesses in goatskins and related

leather products, goat milk and related products, a supermarket and a struggling

FM community radio. The latter, its one losing operation, is nevertheless key to

APAEB’s community learning efforts and is thus seen more as a service than as

business. APAEB has received grants from various assistance agencies other than

the IAF, including international Catholic charities, bilateral aid programs and

Brazilian organizations. However, APAEB is now essentially self-supporting from

its industrial operations.

With its profits (and it must be added that APAEB’s industrial operations are

fully taxed under Brazilian law) APAEB funds the services that are its raison d’être:

• technical assistance in farming sisal and supplementary agricultural crops

and in the integration of animal-raising with agricultural by-products;

• technical training for farmers as volunteer change agents in their own

communities;

• a family agricultural school, a general and agricultural secondary education facility modeled on the French école familiale rurale, serving 79 students in two alternating resident groups;

• experimental programs in hydroponics, reforestation, water collection and

management, and solar energy;

• community seminars in a variety of topics, such as the environment, education and public health;

58 Building Democracy from the Grassroots
• support for community radio;

• support for folk life and cultural activities;

• support for citizenship education and the citizens forum.

APAEB is not particularly democratic in its functions but it is quite so in its

values. APAEB sees a clear role for private enterprise in a democratic society,

apart from its own purely “social” service activities. It believes a society of prosperous, self-sufficient individuals, if connected by civic values, will be ripe to engage in democratic actions beyond the purely productive. APAEB encourages its

beneficiaries and employees to engage in “public” community activities. The

fundamental point in terms of development assistance is that service provision

need not be per se intrinsically democratic to set the stage for a democratic community. To the extent it prepares the service beneficiaries for a life of economic

independence, it primes the pump for broader-based civic activities. APAEB on

one hand runs a notably successful economic support program and provides its

own example of self-sufficiency by essentially paying for itself. 

Beyond that, APAEB motivates its beneficiaries and staff to engage in democratic action and serves as a convener and facilitator. Together with the local

farm workers syndicate, various churches and other civic actors, APAEB was one

of the original conveners of the Foro Ciudadano or citizen’s forum. Conceived as

a space for civic deliberation, the Foro has since been formalized as a separate institution to which APAEB provides office and meeting space. In terms of beneficiary participation in civic matters, clearly, the individual decision to engage in

civic action, and at what level, is a personal one. It may be too much to expect

struggling producers to engage in such action while their economic survival consumes most of their time. But by offering the example of what civic action is

like, APAEB facilitates possible engagement in the future.

In terms of venturing outside its circle of trust, APAEB collaborates with the

municipality of Valente (which donated the land on which the industrial operation sits and covers some of the teaching staff in the family school) but is not directly in partnership. It has cordial relations with the business community,

which is very small in Valente and in the surrounding cities. APAEB took a

courageous step when it partnered with a private marketing firm to promote

overseas export of its sisal carpets. The partner organization was not in Valente

but in the state capital of Salvador. This stretched the limits of a closed rural

community’s willingness to engage with strangers and is a testament to the vision of APAEB’s leadership and the trust of its membership. 

As a business, APAEB is likely to continue to be successful. It can barely keep

up with demand now and has major plans for controlled expansion. The success

of the enterprise will likewise ensure APAEB’s presence as a community organizer

and trainer. Business growth also translates into higher sisal prices, higher incomes for Valente’s small farmers and more jobs in the community, further enhancing APAEB’s credibility. APAEB now needs to let the community develop by

itself, since little occurs there now that is not connected to APAEB—whose

source of ideas is limited to its policy-makers. While effective so far, ideas for further economic advancement beyond sisal and beyond APAEB could emerge from

a broader community process. APAEB’s commitment to community radio is a

step in the right direction, as is its in-kind support to the Foro Ciudadano. Its

business activity should continue unabated as the prime engine of the community’s success. APAEB could now use its considerable legitimacy as a catalyst to

convene a broader and more engaged civic process to seek new opportunities.

All of the Voices 59
Building Development One Entrepreneur at a 

Time in Chihuahua

The “community” for the Fundacion del Empresariado Chihuahuense A.C.

(FECHAC) is metropolitan Chihuahua, with a million inhabitants, and the entire

state of Chihuahua. But FECHAC is not involved in “developing” this community; instead it helps develop the capacities of its residents, one at a time. It was

created in 1991 when a group of the city’s business leaders proposed a self-imposed tax to deal with housing and flood reconstruction and subsequently requested the government keep collecting the voluntary tax to fund FECHAC’s

continued operations.

FECHAC is governed by an 18-member board drawn from its membership of

several hundred business people in nine regions of the state. It has programs in

housing, nonformal education, senior adult education and health as well as a

multi-sector AIDS education program and a convening forum for indigenous institutions. In addition, its “social responsibility” program brings the resources of

the Chihuahua business community to promote participation in civic affairs. It

sponsors a state-wide forum of civil society organizations; a “school for parents”

providing parenting support and education to more than 10,300 families in nine

cities of Chihuahua; and a micro-credit program, funded initially by an IAF

grant, serving more than 1,000 enterprises through 75 urban and rural community banks. FECHAC lavishes attention on its micro-enterprise borrowers, not

only in the business and managerial support it provides but also in a range of activities and attitude formation. Meticulous program management underscores

for participants the importance of sound business practices. 

FECHAC is a firm believer in a strong civil society, which, it emphasizes, can

only be built by strong citizens. It sees its role as the formation of citizens one at

a time. FECHAC subscribes to the idea of entrepreneurship as an attitude that

encourages innovation and risk-taking, not just in business but also in all aspects

of public life. Entrepreneurship arises from a sense of possibilities among engaged committed citizen emprendedores in a democracy itself born of self-confidence and a belief in the need for trusted public institutions. FECHAC’s graduates—all people of modest means—exude a sense of confidence in the future.

FECHAC sees its micro-credit program as an essential ingredient of this belief in creating entrepreneurs one at a time. It does not contradict civic culture,

but rather tries to go deeper into individual roots; the capacity to engage in civic

activities is based on a prior capacity and attitude to emprender. FECHAC sees itself as a promoter of cultural change. Its main challenge, however, is to channel

the individual’s “emprender” energy into shared interests. It requires perhaps a

different vision of the public and private spaces. 

FECHAC today has some civic motivation, but mostly of the “chamber of

commerce” type. It convenes to identify the community’s problems and solutions. FECHAC’s challenge is with its own individual business nature, even if it

has already made a commitment to go the public way in terms of participants

and the membership. It assumes, but hasn’t really operationalized, that individual entrepreneurship (both micro and macro) can evolve into civic entrepreneurship. To operationalize this assumption requires the capacity to innovate in both

spheres, whether through personal drive or public encouragement. 

It is tempting to compare FECHAC with the indigenous organization in San

Pedro el Alto in Oaxaca, also part of this study. There, communal entrepreneurship based on traditional relationships has hindered private entrepreneurship by

60 Building Democracy from the Grassroots
resting on behavioral rules that resist individual innovation and hence collective

evolution. This rigidity may threaten the adaptability and eventual survival of

the organization and the community itself. In FECHAC the opposite happens.

Individual capacity to innovate has run free and with great energy. It has yet to

translate into a new civic sense of the collective.

Chihuahua and FECHAC are due for a hard look at their next step. A shared

conversation as citizens between their (big) business sponsors (mostly men) and

their (micro-) business beneficiaries (mostly women) is overdue. These circles of

trust don’t commonly come together, but FECHAC has prepared the ground for

a meeting of these two groups. It should be encouraged to proceed. Other segments of Chihuahua society may be invited to join the conversation later. Some

may require more work: the poor, the elderly, indigenous groups and youth.

Their comfort level in sitting down as citizens with the business groups—and

vice versa—may need to evolve. Meanwhile, foreign aid donors might consider

small investments in activities to build this civic capital.

Conclusions

The examples above were selected by the Inter-American Foundation as

“successful” projects and hence will not be judged again here. All addressed the

immediate goals for which they were funded. What interests this examination is

the extent to which they succeeded in also leaving a residue of a democratic culture—manifested by the creation of institutions (formal and informal, governmental and social, national and local) that reference public behavior, by the

norms that regulate those institutions and, perhaps most importantly, by a community’s capacity to adjust those norms in response to changing circumstances. 

Evidence suggests 21 a strong connection between a community’s sense of

ownership of its public space and the efficacy of its public actions. It appears the

sense of ownership of the issues heightens the sense of control and hence of the

potential for effective results, regardless of the difficulties. Increased perceived

potential encourages engagement, as the effort would seem less likely to be

wasted. Actual engagement in turn generates experience with what works and

what doesn’t.22 Meanwhile, this shared learning draws the community together

inasmuch as it establishes civic habits of social cohesion—social capital—on

which public institutions are built. 

It would appear that as the community assumes ownership of its public

process, as it invests itself in discovering the underlying issues it must address,

and as it designs its own path to addressing them, it will also feel a strong sense of

ownership over the result. Having a clearer picture of its goals, such a community

will be more willing to experiment with innovation to achieve them. A culture of

engaged democracy will thus be more receptive to innovation, to recasting the

covenants of relationships and the norms of behavior. It will encourage the expression of new ideas and will be more open to adapt to changing circumstances. 

This in turn requires reliable public institutions to mediate behavior, but institutions that are accessible, transparent and responsive. Such institutions should

be seen as owned by the governed and susceptible to their modification. The conAll of the Voices 61

21 For a bibliographic survey, see “Pathways to Citizen Engagement,” Background Report by the

Research Work Group, the Kettering Foundation (June 2001). 22 In Development from the Grassroots (Inter-American Foundation, 1984), Albert Hirschman explores the idea of the “generation and conservation of social energy,” whereby the practices learned

in one community action may be drawn upon for other such endeavors in the future.
nection between trustworthy public institutions and economic success is overwhelming.23 The predictable behavior they encourage operates on four levels:

• It permits transacting among many communities under uniform norms,

allowing the economies of a larger scale of operation.

• It reduces the uncertainty cost, thereby encouraging investment.

• It reduces the cost of transacting between strangers, as it minimizes the

need for alternative positions and lowers the cost of information.

• It makes government action more predictable, encourages accountability

and leaves fewer spaces for corruption. This gives public policies a “trust

space” of time in which to take effect and reduces the political incentive

to implement less desirable alternatives. 

Note, however, economic success is not a short-run guarantee of civic engagement. While such engagement will be necessary for sustained economic success, it is quite feasible that segments of a community will get their segregated

houses in economic order and achieve short-run success. Even well-meaning

community development groups may choose to ignore the civic implications of

their success or resist the incorporation of democratic values. This is characteristic of underdeveloped countries; it is, in fact, the cause of their underdevelopment. It inhibits the formation of the social capital indispensable for sustained

development; a society can remain in this reduced state for an indefinite time.

Finally, a culture that welcomes innovation will require a different definition of leadership. Such an inclusive community will foster a sense of self-esteem, confidence and identity among those who see themselves equally as its

owners. Leadership in that context becomes everyone’s willingness to propose,

to convene and to offer solutions. All feel comfortable in occupying the public

space. Meanwhile the role of the public servants of that community is to interpret the will of those governed and inspire them, not to expect them to follow.

Social cohesion and sustained economic success will be in jeopardy if groups

within a society are excluded from its broader process. The lack of commitment

to abide by covenants generated by the deliberation of others will threaten the

applicability of those covenants. To maintain such exclusion requires limiting

trust to those inside each person’s circle of acquaintances, where loyalty is rewarded instead of merit. This means forsaking the economic advantages of a participatory culture, as well as its adaptability and proclivity for innovation. A

democratic culture, on the other hand, realizes the need for inclusion as the

only guarantee of the reliability of its covenants and hence of its public institutions. A democratic culture will seek to include all of the voices.

The above is excerpted from Dr. Daubón’s longer work on his recent study, also titled All of the Voices. His article on the study will appear in the next issue of Grassroots Development, the IAF’s journal, and his recommendations to donors can be accessed at www.upd.oas.org—ED.

62 Building Democracy from the Grassroots

23 See R. Daubón and H. Saunders (op.cit.) for a detailed presentation of this argument.
I

n recent years, El Salvador, like many other Latin American countries, has undertaken promising local development initiatives. The majority have focused

on decentralizing national government functions and funds and on opening

local government up to citizen participation. As a result of this process, the municipalities have begun to play a significant role in providing social infrastructure,

aqueducts, sewer systems, power lines, sports facilities and so forth, while taking

practical steps to fulfill roles assigned, but rarely assumed, in the past, such as

urban renewal and recovery of public spaces. Moreover, the public funds allocated

to municipalities increased from approximately 2 percent of the national government’s net revenue in 1997 to 6 percent in 1998. At the same time, the implementation of citizen participation in local planning, formation of development

committees, accounting activities and open meetings are significantly contributing to democratizing public administration and organizing local actors.

Despite this progress, two problems threaten the sustainability of the local

processes which have opened up. One is the scarcity of funds available for decentralized investment in territorial development. The other is the business sector’s weak participation in the territorial coordination processes initiated.

Receipt of funds by the public sector at the municipal level in El Salvador

and, consequently, the municipality’s investment capacity is, as in most Latin

American countries, extremely weak. This is explained by the traditional

highly centralized state model, in which local entities were conceived more as

the last link in a top-down national state than as the first link in a modern,

representative state.

In 1998, El Salvador’s municipalities received just 3.6 percent of public sector current revenues. Furthermore, these funds were unequally distributed; 38

percent of the amount received by municipalities went to the Office of the

Mayor of San Salvador. Since 1998, the municipal share of current public sector

revenues has increased to 8.5 percent and imbalances in the different municipalities’ income have decreased. But funding remains low in relation to what is

needed for local development; the mayors’ offices receive on average for their

operation and investments ¢210 (US$23.00) per inhabitant.

Moreover, the opening up of municipal administration, begun in 1994, consists mainly of implementing participatory local planning exercises and setting

up local development committees. It has been dominated by community groups

with minimal participation by economic agents. Consequently, most local plans

concentrate investments almost exclusively on social infrastructure and do not

provide for expansion of the territories’ economic capacities. This is a strategic

63

Coordination and Partnerships for

Local Development: The Experiment

of the Matching Fund for the

Development of Nejapa

By MARCOS RODRÍGUEZ
weakness of the current local development processes. Another weakness, just as

important, is the near-total dependency on the national government or international cooperation for funding. 

To address these challenges, the municipality of Nejapa implemented the

Matching Fund for Local Development experiment in 1998. Information on this

experiment has already been presented at various international events. It is currently being replicated in seven other El Salvador municipalities: Soyapango,

Ilopango, Nueva San Salvador, Mejicanos, Apopa, Acajutla and Sonsonate.

The Nejapa Matching Fund for Local Development

The Nejapa Matching Fund for Local Development is a partnership of various entities that are part of the institutional fabric of the municipality. Four sectors participate in this partnership: the public sector, represented by the municipality; the business sector, represented by an electric power company (Nejapa

Power) and a bottling company (EMBOSALVA); grassroots social organizations,

represented by a council of community groups (the Association of Communities

for the Development of Nejapa, ACDN); and institutions which promote development, represented by two NGOs (FUSAI and DUNDE). The international cooperation sector, represented by the Inter-American Foundation (IAF) and the

Swedish International Development Agency (ASDI), provides outside support.

The Fund is a sustainable instrument for the raising, organization, coordination and integration of funds and capacities of the different sectors and of private and state actors, at the local, national and international levels, for the development of the municipality of Nejapa. The raising of funds for investment in

local development projects is the strategic point at which public and private interests converge. Consequently, the Fund is not an entity specialized in delivering specific services and implementing projects, but an agent and catalyst of internal and external funds for local development projects, which are set up

through the coordination and participation of the territory’s key actors. The

Fund does not attempt to implement the projects it finances, but encourages institutions with the necessary special capabilities to execute them with municipal

support. Another noteworthy feature is that the Fund is a “matching fund.” This

means it is not set up to self-finance local development, but to serve as “seed

money,” making it possible to “leverage” additional investments and multiply

resources. Finally, large companies join this Fund as co-investors, not as philanthropists, because they understand their contribution will benefit their own bottom line. This sets a precedent in El Salvador for business’ awareness of links between territorial development and competitiveness.

The goal of this new type of local institution is to generate a steady flow of

financing for the programs and projects identified and prioritized by the local

community. The Fund also has major objectives in connection with democracy

and good governance at the local level: 

• promoting the role of all the municipality’s key actors, including the

mayor’s office, communities, private enterprise, and local and international NGOs, in supporting local development;

• promoting a culture of coordination and partnership as an excellent route

to a sustainable local development process in Nejapa.

64 Building Democracy from the Grassroots
Institutional Components

The Nejapa Matching Fund for Local Development’s governing documents

guide its operation. These documents, the charter and the operating rules, were

drawn up during coordination and negotiation of Fund operations. The operating rules establish the administrative and organizational structure and operating

periods; member categories, the initial investment and the duration of their participation; the powers and functions of the Fund’s various organizational authorities; the decision-making mechanisms; types of projects to be carried out and

the amounts of investment; project profile formats; oversight and reporting

mechanisms; and, finally, the means of organizing and disclosing information

about the experiment. The Fund’s charter includes four key agreements: the creation of the Nejapa Matching Fund for Local Development; the approval of cooperative agreements with entities investing in the Fund; approval of the Fund

rules; and the mechanism for administering Fund revenues. 

The Fund’s organizational structure includes the following: The shareholders

meeting, the Fund’s highest authority, is attended by representatives of the institutions signatory to the charter. Authority for ongoing Fund management rests

with the board of directors whose 13 positions are filled through under a quota

system, guaranteeing balance among the different sectors constituting the Fund.

The co-management department, comprised of the office of the mayor and one

of the member NGOs, is responsible for administering the funds. The technical

department, comprised of NGO personnel, carries out the Fund’s day-to-day activities. The coordinating team, comprised of a representative of each of the associated institutions, is responsible for monitoring Fund activities and preparing

proposals for the board of directors.

Financing

To date, the Nejapa Matching Fund for Local Development has raised

¢7,100,668 (US$814,297), including direct disbursements by international agencies and businesses as well as matching contributions for certain projects from the

municipality (see Table 1). This includes donations in kind (principally trees for

reforestation) from the municipality and EMBOSALVA, and work contributed by

community members, students and soldiers. Also deserving mention is support

from local organizations, such as El Ángel Cooperative and FUNDANEJAPA,

which are not part of the Fund but have contributed to certain projects.

Although the funds raised may seem meager in view of the investments

needed for Nejapa’s development, they are significant considering the 1994 municipal budget of ¢244,000 (US$27,897) and that in 1998 the total transfers from

the state to the municipality came to ¢4,162,361 (US$476,242). It is anticipated

that the Fund will be financed in the future through new contributions by current

members; contributions from the central government through matching grants;

recouping investments from profitable local development activities; contributions

from businesses new to the Fund; the raising of funds by other NGOs that have

not yet joined; and contributions from other international cooperation agencies.

Procedures

In practice, the Fund’s most active body is the Coordinating Committee,

which meets every two weeks and makes operating decisions as a group and by

consensus, honoring the cooperative nature of the Fund management and develCoordination and Partnerships for Local Development 65
opment process. As would be expected, the Fund’s most important decisions involve the approval and implementation of projects. The principal guiding document for the Matching Fund’s investments is the municipality’s Local Development Plan, which was developed using mechanisms that encourage the

participation by local community and that take its priorities into consideration.

The ACDN’s member communities are consulted through their representatives as

to which projects should be funded. The Coordinating Committee receives requests to support priority community projects. After a study of the technical, financial and social feasibility of each request, and approval of an order of priorities, the Coordinating Committee submits the project profiles to the Fund’s

board of directors for study and approval.

Project eligibility criteria have evolved over time and with experience. At

present, projects meriting priority support are those that meet the following conditions: broad coverage of beneficiaries; inclusion in the Local Participatory Development Plan; matching funds raised by the community equivalent to at least

15 percent of the project cost ; a contribution from the mayor’s office of at least

20 percent of the required funding; and matching funds from other public or

private institutions or the social sector. When the entities to implement projects

are being selected, institutions raising matching funds receive priority, provided

they are experienced in the field and submit competitive cost figures. If no institution capable of raising matching funds is found, an entity is chosen based on

the submission of three bids.

In its two years of existence, the Fund has implemented 12 projects representing an estimated investment of ¢3,070,904 (US$352,166). These projects

have directly benefited 53,753 people and at least 11 public, private and social

sector institutions. As described in Table 2, the projects fall under four of the

seven development strategies covered by Nejapa’s Local Development Plan: envi66 Building Democracy from the Grassroots

Table 1. Contributions to the Matching Fund for the Development of Nejapa (1998–2000)

Source Method Colons Dollars Percent

Inter-American Foundation Direct disbursement to the Fund account 15,10,469 $173,219 21%

Swedish International Direct disbursement 3,015,167 345,776 42

Development Agency

EMBOSALVA Direct disbursement 536,423 61,516 10

Donation and transport of 40,000 trees 121,000 13,876

Nejapa Power Company Direct disbursement 536,423 61,516 8

Financial support to San Jerónimo 14,000 1,606

Mayor’s Office 20% funding of five projects 167,358 19,192 4

35,000 trees for reforestation 117,000 13,413

Communities, students, soldiers Labor 207,020 23,741 3

El Angel Cooperative 50% price reduction on land for housing 800,000 91,743 11

construction

Fundanejapa Financing of 10% of the cost of five projects 75,808 8,694 1

Total 7,100,668 814,292 100%
Coordination and Partnerships for Local Development 67

Table 2. Projects Financed by the Matching Fund for the Development of Nejapa (1998–2000)

Individual

Cost Beneficiaries Institutional

Project Colons Dollars Direct Indirect Beneficiaries

1 Cerro Nejapa reforestation 557,110 63,889 691 125,000 EMBOSALVA

Hydroelectric plants

Mayor’s office

2 San Antonio River 320,000 36,697 9,997 125,000 EMBOSALVA

management study MECAFE

CINTEC 

Cooperatives

Mayor’s office

3 Purchase of land for 800,000 91,743 2,700 30,000 EMBOSALVA

450 families Cooperative

Mayor’s office

4 Hydrogeological study in 50,000 5,734 2,944 – Mayor’s office

Tutultepeque

5 Construction of El Polvón 279,000 31,995 7,620 – Cooperatives

bridge Mayor’s office

6 Expansion of electrical 294,864 33,815 798 – CAES

power: El Jabalí Mayor’s office

7 Introduction of electrical power: 82,980 9,516 96 – CAES

El Relámpago Mayor’s office

8 Expansion of electrical 45,720 5,243 28 – CAES

power—Sector 85 Mayor’s office

9 Sports complex 130,010 14,909 13,602 – CAES

electrification Mayor’s office

Businesses

10 Construction of sports 383,220 43,947 13,602 – Mayor’s office

complex swimming pool Businesses

11 Support for the purchase of 14,000 1,605 1,095 – Plan Internacional

a plot of land for a school

12 Citizen participation 114,000 13,073 600 30,000 ACDN

Mayor’s office

Businesses

Total Cost 3,070,904 352,166 53,773 210.000
ronmental restoration, improvement of the social infrastructure, stimulation of

local economic development and promotion of citizen participation.

Results

Despite the fact that the Nejapa Matching Fund for Local Development is a

young institution, in existence for just three years, and some uncertainty and expectation regarding its future, the following results have been achieved:

• Parties historically operating independently of each other, such as the

business sector, local government and grassroots organizations, have been

able to sit down at the same table to work on a common cause. This new

strength could be central to the municipality’s development.

• A new mechanism has been established which to date has raised

¢7,100,668 (US$814,297) for the municipality’s development.

• Ten projects have been implemented, directly benefiting 53,753 people

and helping to address strategic challenges to the municipality’s development. The experiment’s replication in seven other municipalities in El Salvador is proof of significant national recognition. Also, the promotion of

matching funds for local development has been adopted as a priority

measure by the National Local Development Strategy (ENDL).

• There is considerable international interest in innovative initiatives that

promote partnerships for local development and sustainable development.

The Nejapa experiment won an award in a national competition, financed

by the Inter-American Development Bank, for best partnerships to combat

poverty in El Salvador. It was also was selected for presentation in connection with the Dubai International Award for Best Practices in Improving

the Living Environment.

Contributions to the Underlying Theory

The results achieved by the Matching Fund in Nejapa demonstrate this is a

promising initiative for building partnerships among representatives of the state,

private enterprise and the social sector in promotion of local development. Such

an association is a partnership inasmuch as it is based on an intersector cooperation agreement whose purpose is to achieve medium- and long-term (not shortterm) objectives and which enables the actors to share rights, obligations, risks

and benefits in an institutional framework that guarantees equity for the parties.

This type of initiative can be an effective fundraising alternative for investments

in local development in municipalities with medium-sized and large businesses.

The “matching funds” mechanism also makes it possible to partner investors inside and outside of the territory to implement projects that are beyond the scope

of any single party because of the magnitude of the risks involved.

In addition to raising funds, this type of local association provides the opportunity to create and strengthen ties among the principal actors in the municipality, making them all responsible for facing the challenges of local development. Two factors are especially important: the success achieved by including

large companies in these types of efforts, and the participation of grassroots social organizations as members and not just as beneficiaries. From a national and

Latin American perspective, the initiative is also attractive as a way of strengthening democratic governance through the promotion of social cooperation in a

context of sustainable development.

68 Building Democracy from the Grassroots
The philosophical principle on which this partnership is based is the recognition that those involved have not only conflicting interests (especially the

state and private enterprise), but also shared interests, which can be identified

and developed for the benefit of all parties. This new approach also involves, implicitly, a rethinking of what “public” means. This is no longer perceived as a set

of powers exclusive to the state, but rather as a set of factors affecting the wellbeing of individuals and institutions in the territory. It follows that the management should be shared.

In general terms, all individuals and institutions in the objectives benefit

from a more stable, healthy, harmonious, and sustainable society. However, this

initiative also affords immediate, specific benefits for each involved sector.

These initiatives give businesses the opportunity to:

• be recognized as allies in pursuit of the public welfare, a definite strength

in a highly-polarized social context;

• have direct, dynamic, transparent channels of communication with other

actors that can affect their own performance;

• acquire partners in setting up environmental conditions that boost their

competitiveness; and

• have an efficient, transparent, non-political mechanism for co-investment

of funds for project implementation.

Local government has the opportunity to:

• gain new local and international investors in development;

• achieve recognition as innovative and open to intersectorial cooperation

for local development; and

• have mechanisms for participating with private enterprise to address day-today problems and include private enterprise in local development efforts.

The grassroots organizations improve their strategic position for:

• implementing projects that improve quality of life;

• increasing their influence over prioritizing local investments; and

• having a funding source to keep them going.

NGOs involved in the Fund can acquire: 

• new knowledge about interinstitutional cooperation for local development;

• prestige as innovative institutions in the field of development; and

• access to new methods of raising funds for development.

Lessons Learned 

In general terms, it can be said the Fund experiment was facilitated by the

presence, at the national level, of a democratic climate that fosters shared responsibility and cooperation on the part of the various social, financial, and political groups. Another aspect, which is national in scope and which has contributed to the growth of this initiative, is increasing interest in the

decentralization of the state and in the municipality as a space for managing development. Until a few years ago, a large business would not have seen the municipality and the local community as valid participants in achieving its aspirations. The municipality and the local community would not have felt capable of

establishing equitable relationships with big business.

A key factor for success in the specific case of Nejapa was the fact the municipal government sees itself as a promoter of development, relying on the particiCoordination and Partnerships for Local Development 69
pation of all actors in the local community, and not just as a service provider

and producer of social infrastructure projects. This has been an apparent characteristic of Nejapa since 1994, when various spaces opened up for citizen participation and inter-institutional coordination with local actors and actors from

outside the municipality. 

Regarding the participation of business, it would seem important for the

municipality to be able to count on visionary businesses, such as Nejapa Power

Company, which understand that much of their competitiveness depends on the

development of the territory in which they are located. Company conditions fall

into line with the initiative early on and help promote it.

Grassroots organizations as partners in the Matching Fund have been another key to success. Organizations such as ACDN give the Fund a high degree of

social representation in the partnership. Their participation demonstrates that

this is not an association of institutions that holds power to “help poor people,”

but an initiative to facilitate an inclusive development process.

An aspect which should be highlighted is the role of innovator, intermediary and partner played by the NGOs. In this respect, if the role of intermediary is

to succeed, it is important that the entity playing that role earn, from the outset,

the parties’ confidence in its professional ability, the transparency of its fund

management, and its proactive approach to addressing local conflicts.

Also important to the partnership’s success is support from outside the territory. The Inter-American Foundation, DIAKONIA and Sweden’s ASDI have

brought to the local process a long-term perspective and participatory methodology aimed at encouraging responsible leadership and cooperation among the

local actors. 

Beside the contribution that comes from the presence of each actor, it is necessary to emphasize the importance of a local development plan drawn up in a

participatory mode. Participatory planning has been a key mechanism in coordinating interests in Nejapa and has played a role in directing Fund investments

toward priorities that have broad social support and a vision of the future.

Very clear in the Nejapa experiment is that partnership initiatives require

time and dedication. For example, the FUSAI project approved by the IAF to facilitate establishment of the Fund, originally envisioned as requiring two years,

had to be amended twice. In this respect, it is important to bear in mind that it

is easier to establish and sustain the partnership when things move from the

simple to the complex, without putting the cart before the horse, and when

there is an attempt to achieve small successes that encourage the parties to tackle

bigger challenges.

Partnership construction should be something more than a sum of individual interests and a distribution of duties among the partners. It is essential to develop institutional mechanisms and a working style that encourage participation, shared responsibility, and progressive acceptance of initiative by those

involved. A key to success during the partnership’s gestation is subjecting the

preliminary idea to a consultation process in which the various actors offer their

input and expectations.

As the partnership evolves and confronts more complicated challenges, the

rules governing its operation must continue to develop and become more specific. While the Fund, for example, was established with one document and a set

of basic rules, during its evolution rules had to be defined more precisely: the

methods for selecting implementers; the eligibility conditions for projects; and

the parties’ financial contributions.

70 Building Democracy from the Grassroots
Finally, the experiment showed conflicts should not be avoided on the pretext that they threaten the partnership. They should be addressed purposefully,

since the will of sectors to cooperate is a cumulative process, built up gradually.

It is easy to succumb to the temptation to avoid addressing conflict, especially

conflict between the “public” and “private” sectors, for fear of negatively affecting fundraising. But the Nejapa experiment demonstrates just the opposite. The

Fund served as a space for participation and coordination among the actors in

the territory and their will to cooperate has gradually grown stronger.

Coordination and Partnerships for Local Development 71

S

ince the 1930s, the Bolivian government has been centralized, vertically

commanded and controlled, and state capitalistic, a model institutionalized

through the National Revolution of 1952. This was a corporativist state

which sought to involve certain social sectors in political life, sectors that held

fast to power and played the main parts therein. By contrast, the structure of the

new state we are now building is decentralized, participatory and intersecting.

Whereas the centralized state focused its resources on the central urban

axis—La Paz, Cochabamba and Santa Cruz—the new state has redistributed political power through municipal decentralization, and economic power through

co-participation. The municipalities, in proportion to their size, currently account for more than 21 percent of public investment, a figure 10 times greater

than levels in the past.

The Bolivian economy has traditionally been state capitalist. The new state

has a market economy and pursues an economic democracy that includes all citizens. Formerly, the state was authoritarian and systemically corrupt, due to the

persistence of a monopoly over the decision-making process and over discretionary authority as well as a lack of accountability. The new state allows for

greater participation, and is institutionalized and willing to engage in dialogue.

The old state was Praetorian, in Huntington’s sense, characterized principally by

confrontation and polarization. Each corporativist sector exerted pressure on the

state, and they opposed one another by representing a particular group, a situation that was not necessarily in society’s interest. The new state seeks to develop

local identities vis-à-vis the respective territories and to lead citizens to identify

with the nation as a whole.

The corporativist state governed through top-down social control and surveillance. Bolivia was a police state that used force to persuade and govern the

citizenry and held a monopoly over the means to engage in violence. Power

elites besieged the state, sparing nothing to get a slice of the pie for themselves.

Pressure groups were established for the purpose of obtaining privileges from the

state. We do not refer to any specific group; they may have been groups of businessmen, unions, students, or military men, who organized themselves around

specific demands but did not represent society as a whole, much less the poor,

who remained marginalized. It was the 1994 Law on Popular Participation that

initiated Bolivian state decentralization by transferring authority and resources

to municipal governments and allowing civil society organizations to participate

in municipal administration.

73

Building Democracy from the

Grassroots in Bolivia

By R O N A L D M A C L E A N A.
Without this “shock” method of transferring authority and resources, which

was not gradual, and did not happen “bit by bit” as is usually the case, it could

have taken years to reach where we are now and we might have had to endure

the discretionary authority and political will of alternating leaders. Instead decentralization took shape as a series of regulatory instruments that transformed

the state in an uninterrupted process, “in one fell swoop.” This entailed various

risks and costs, as the institutional capacities of subnational authorities were limited; there was chaos with respect to territorial delimitation and demarcation; socioeconomic information was lacking at provincial sectional level; and there

were other problems which remain unsolved.

Despite the various difficulties and the lack of a lead central authority, one

capable of linking and directing sectoral policy formulation in the framework of

a single and institutional reform process, and of coordinating the activities of

the government agencies involved, decentralization has been consolidated

within local public authorities and among various social and institutional players. Without them, it would have been impossible to structure the network as a

whole and develop the operational logic at municipal and territorial levels.

In view of the way in which the citizenry has taken responsibility for the

process, and as the political system includes a means for negotiating public policy, a single apt phrase comes to mind: “Think nationally, act locally.” Our challenge is how to build a new state, from a municipal perspective. 

The consensus state we now seek to build involves governance by networks

wherein the municipalities play the part of small state. The Bolivian state is becoming decentralized and subdivided, consolidating itself within the territory of

each municipality. It is evident that, under this scheme, governance takes on a

new form. Social control becomes control by the citizen over the state. The relationship between the state and the individual is altered. Unfortunately, we have

inherited European constitutional forms, which were designed to defend the

state against the individual, whereas the U.S. Constitution protects the citizen

from the state. It is precisely this transition that we are making. We seek states,

defined in terms of municipalities, each of which protects its citizens and promotes their welfare.

We are witnessing the development of a horizontal and participatory statesociety relationship. The state is becoming a facilitator, a good parent seeking excellent relations among parties. In such a relationship, balance is only achieved

through regular stocktaking, so that no one group takes precedence over others.

This is the new consensus governance in which there is balance among all

groups and the state ceases to act as a policeman and becomes instead a facilitator of the horizontal relationship among citizens.

Grassroots democratic power thus emerges in response to the problem of urbanization. Citizens appropriate their own destiny in that they make decisions,

determine the scale of expenditures and where they are made, and establish

their priorities—whether they want a sewer system or paved road. In the past, it

was the mayor who made decisions on municipal issues, the residents feeling

that this was not their preserve.

Power is being devolved to the local level through pilot projects in three

cities—La Paz, Cochabamba and Sucre—to ensure the poor are included in popular participation in those cities, where resources traditionally reach only the city

centers and benefit only the areas where the council members or the mayor resides, not where the poorest citizens live. The same effort is being made to in74 Building Democracy from the Grassroots
clude indigenous communities, such as the Guarayos in Santa Cruz or the native

peoples of the provinces of Gualberto Villarroel, La Paz, Potos or Chuquisaca.

We have also begun a process to ensure that the limits of indigenous communities and the limits of municipalities coincide. For cases where political divisions do not coincide with the limits of indigenous territories or communities, a project is now being developed to ensure they do by the end of 2001.

Similarly, within cities, we will ensure each district receives proportionate coparticipation resources and that the poorest also receive Highly Indebted Poor

Country (HIPC) resources.

The municipalities know administrative budget allocations are made according to population size, and that the government cannot be approached for additional resources. Accordingly, it is important for each municipality to make

budgetary adjustments and to identify its primary needs so that response can be

immediate. We must cease to expect central government to solve every problem.

Solutions must be sought within the local sphere. That is where the new form of

governance is taking us. That form is based on a very long process of dialogue, as

consensus-building has been under way for six years. A substantial base has been

developed and must be consolidated.

We have moved from a local policy orientation to one of anti-poverty. We

are discussing, at the district level, how to combat poverty. From discussions on

co-participation, we have moved to decisions on the allocation of public investment, a very important area. We have moved from a quantitative to a qualitative

approach. Bolivians are now seeking quality in education, health and services.

This represents a great social advance.

All Bolivians are contributing to the development of a national poverty reduction strategy. No longer does an expert or one of those notorious international consultants come to tell us how to combat our poverty. We are doing this

ourselves. Through national dialogue, the guidelines for combating poverty were

developed, a method of obvious value. No one knows better than the poor what

must be done to combat poverty.

Combating poverty will become long-term state policy over 15 years. Current discussion focuses on the Law on National Dialogue to be enacted by Congress and then promulgated by the president. This constitutes the greatest and

most extraordinary effort aimed at the national consultation undertaken to develop a strategic guideline. This is understood to mean the creation of broader

spaces for participating in and influencing both the operation and the formulation of policy. The draft law contains two notable essential elements:

• A process of decentralization in the health and education sectors will be

completed, through extension of authority and transfer of resources for

personnel management in both sectors, so that residents and parents

have a say, and may decide to reward good teachers or pay better salaries,

or to punish very inadequate teachers, teachers who do not prepare their

lessons and teachers who extort money from parents. Similarly for the

health sector, services will be administered at the local level. Popular participation is distributing US$200 million throughout the country each

year, and the decentralization of education and health will add an additional US$400 million. With the additional resources from the investment and development funds, this may reach almost US$1 billion, an unprecedented and unambiguous figure in furtherance of decentralization

within Bolivia.

Building Democracy in Bolivia 75
• The fund clearance policy promoted by the current government is the first

serious attempt at redefining intergovernmental fiscal relations. Discretionary, privileged management of investment and development funds

will lead to a transparent fund allocation policy, whether the funds are in

the form of grants or loans, through technical formulas and criteria that,

based on menus subject to the sector-defined strategic guidelines, along

with co-financing and competition, will change the way in which municipal investment is made as well as its orientation. We thus seek to close an

efficiency gap that had been a point of contention in the Bolivian model.

These are the main proposals for furthering decentralization: Faith in the individual, in citizen participation, and in democracy—mechanisms that enable us

to improve standards and generate the conditions for sustainable human and

economic development.

76 Building Democracy from the Grassroots
S

ummarizing the forum presentations, Darcy Ashman identified themes that

had emerged and indicated challenges in formulating policy to facilitate

building democracy from the grassroots. From both the content of the

forum as well as from her own research and experience, Ms. Ashman extracted a

central hypothesis: Decentralization is more likely to foster grassroots democracy

and its anticipated consequence, local development, if two conditions are met: 

• The central government transfers sufficient resources and authority to the

most basic units of government at the local level. 

• Poor and marginalized citizens increase their participation in local decisions, including resource allocation. 

Transfer of Authority and Resources

Underlying the shift in power from the central to the local level is policy

crafted on one of three models: 

• devolution, a decentralization of legislative and administrative decisionmaking accompanied by a reallocation of resources;

• deconcentration, a decentralization of administrative authority;

• delegation, decentralization by transferring service implementation to institutions external to the government. 

Whether one model is used, as in Bolivia, a case of devolution, or a combination of all three, as in El Salvador, the transfer of power is cornered on a constructive use of authority by a pro-active central government: 

• to provide the legal framework; 

• to lead the process at the executive level; 

• to extend fiscal and technical resources and training; 

• to structure an equitable allocation among small and large municipalities. 

Empowerment of Poor and Marginalized Citizens at the

Local Level

Many speakers, panelists and participants believed decentralization can

allow poor and marginalized groups to take the initiative and make the decisions

affecting their development needs. There is already evidence local governments

77

Conclusions and Implications

Compiled from the presentation by DARCY ASHMAN
are using increased autonomy to pursue development opportunities. While these

examples are not always replicable, they are still “best practices” from which to

learn: 

• Associations of local government officials can foster dialogue and advocate for supportive policies. 

• There is a need for the development of human resources through education, training and experience. 

• Grassroots groups can be strengthened to represent their members and engage with other actors, such as non-governmental organizations, private

enterprise and foreign assistance agencies.

Elements of the Process from Decentralization to

Democratization to Local Development

• Time is essential to genuine development and social transformation, especially in societies without a tradition of civic participation at the local level. 

• Learning must take place at multiple levels—by individuals, the families,

organizations, networks and societies. 

• Core competencies for functional collaborative partnerships that further

development include the capacity to build trust; to engage in dialogue, negotiation and deliberation; to innovate; to respond; to adapt; and to lead

by facilitating and inspiring, rather than domination.

Implications for Policy-Makers

The experiences and findings presented complement academic and policy

studies and can be helpful in identifying models and hypotheses to test for other

settings. The implications for those attempting to build democracy from the

grassroots include the following:

• Central governments must not only enact strong, well-designed policies,

but also a legal and regulatory framework, including a body of civil rights.

They must follow through with effective strategies, implementation plans,

goal-setting, commitments and assessment. 

• Donor governments with sound policies supportive of partnerships and

civil society must be aware that a focus confined to accounting and results

can be counter-productive. To encourage effective partnerships and manage the risks of development projects, donors need to be responsive, flexible, innovative and committed for the long term. 

• Grassroots development practitioners have available a widening range of

partners willing to find common objectives and to negotiate plans and

strategies that produce concrete benefits for the community. 

78 Building Democracy from the Grassroots
David Valenzuela

President, Inter-American Foundation

Arlington, Virginia

e-mail: dvalenzuela@iaf.gov

David Valenzuela’s career with the Inter-American Foundation began in 1979.

He has since served the Foundation as representative for Peru and Bolivia; senior

representative for the Andean Region; regional director for the Southern Cone

and Brazil; regional director for Mexico, Central America and the Caribbean; vice

president for programs; acting president; and, as of January 2001, its president. In

1990, he took a five-year leave of absence to re-establish and direct the Peace

Corps in Chile following the country’s return to democracy. Before joining the

IAF, Mr. Valenzuela was, from 1976 to 1979, Andean regional representative for

Church World Services, based in Peru; from 1971 to 1976, the Peace Corps’

deputy country director for El Salvador; and, from 1968 to 1971, Latin American

program officer for the International Secretariat for Volunteer Service, based in

Geneva. A U.S. citizen, Mr. Valenzuela was born and raised in Chile.

Elizabeth Spehar

Executive Coordinator, Unit for the Promotion of Democracy, 

Organization of American States

Washington, D.C.

e-mail: espehar@oas.org

Since her appointment as the UPD’s executive coordinator in 1995, Elizabeth

Spehar has organized a number of electoral observation missions, developed her

unit’s expertise in conflict resolution, and spoken and written extensively on OAS

and democracy issues. Before coming to the OAS, she headed the Americas Program at the International Centre for Human Rights and Democratic Development

in Montreal. She has worked as a development consultant for the International

Development and Research Centre and for the Canadian International Development Agency, particularly in the areas of Latin American regional organizations

and human rights. She was also a program officer for the United Nations Development Program and for Match International, an NGO dedicated to women in

development. Ms. Spehar received her B.A. from Queen’s University in Kingston,

Canada; her Diplôme d’Études Superieures from the Université de Pau, France;

and an M.A. in international affairs from Carleton University in Ottawa.

79

Panelists’ Biographies
Lester Salamon

Director, Center for Civil Society Studies, Johns Hopkins University

Baltimore, Maryland

e-mail: mbilzor@jhunix.hcf.jku.edu

Lester Salamon is a pioneer in the empirical study of the nonprofit sector.

His 1982 book, The Federal Budget and the Nonprofit Sector, documented, for the

first time, the scale of the nonprofit sector and the extent of its government support. His Partners in Public Service: Government-Nonprofit Relations in the Modern

Welfare State won the Outstanding Book Award for 1996 from the Association for

Research on Nonprofit Organizations and Voluntary Action (ARNOVA). The results of his work in the international sphere appear his books The Emerging Sector

and Global Civil Society: Dimensions of the Nonprofit Sector as well as in an entire

series on the international nonprofit sector published by Manchester University

Press. He is also the author of America’s Nonprofit Sector: A Primer, widely used in

college courses.

Dr. Salamon has a B.A. in economics and policy studies from Princeton University and a doctorate in government from Harvard University. He has been director of the Center for Governance and Management Research at the Urban Institute in Washington, D.C., and deputy associate director of the U.S. Office of

Management and Budget. Before coming to Johns Hopkins, he taught at Duke

University, Vanderbilt University and, during the civil rights movement, at

Tougaloo College in Mississippi. He serves on the U.S. Agency for International

Development’s Advisory Committee on Voluntary Foreign Aid; on the boards of

directors of the Maryland Association of Nonprofit Organizations and the Chesapeake Community Foundation; and on the editorial boards of Voluntas, Administration and Society, Society, Public Administration Review and Nonprofit and Voluntary

Sector Quarterly.

Carlos Hugo Molina Saucedo

President, Centro para la Participación y Desarrollo Humano Sostenible

[Center for Participation and Sustainable Human Development] (CEPAD)

Santa Cruz, Bolivia

e-mail: chmolina@roble.scz.entelnet.bo

During the 1990s Dr., Molina Saucedo was actively involved in the Bolivian

government’s decentralization process, including as the country’s first secretary

for popular participation. Legislation drafted with his assistance includes amendments to the Political Constitution of Bolivia, the Executive Branch Ministries

Act, the Law and Regulations on Popular Participation and the Law and Regulations on Administrative Decentralization. He is currently a consultant to decentralization and participation programs in Guatemala, Nicaragua, Panama,

Paraguay and Venezuela, and to 50 Bolivian municipal governments. Dr. Molina

Saucedo received his law degree from Gabriel René Moreno Autonomous University in Santa Cruz, to which he later returned to teach, conduct research, chair

the department of administrative and public international law, and to serve as

the school’s secretary general. He has published 12 books and is a columnist for

several newspapers.

Neville Duncan

Director, Consortium of Graduate Schools

Director, Sir Arthur Lewis Institute of Social and Economic Studies

University of the West Indies 

80 Building Democracy from the Grassroots
Kingston, Jamaica

e-mail: nduncan@uwimona.edu.jm 

Neville Duncan has degrees in economics and government from the University of the West Indies and a doctorate from Manchester University. Dr. Duncan

has researched Caribbean government and politics, political economy, poverty,

community empowerment and non-governmental organizations, as well as issues in international relations. He is the author/editor of nine books or monographs, 10 reports and 70 academic articles as well as hundreds of other papers

and manuscripts. In addition to his considerable scholarly work in governance,

poverty and community development, he has been a consultant to the InterAmerican Development Bank, World Bank, OAS, United Nations Development

Program, UNICEF, CARICOM, OXFAM and various NGOs, among other clients.

Ramón Daubón

Associate, Kettering Foundation

Washington, D.C.

e-mail: KFDaubon@aol.com

In addition to his position with the Kettering Foundation Ramón Daubón is

executive director of the Caribbean Environment and Development Institute in

his native city, San Juan, Puerto Rico. He also chairs the Esquel Group Foundation’s Civil Society Task Force in Washington and advises the Inter-American

Democracy Network, the Canadian Foundation for Latin America and the

Georgetown University Caribbean Studies Group. Dr. Daubón was deputy assistant administrator of AID’s Bureau for Latin America and the Caribbean; the

Inter-American Foundation’s senior representative for, successively, Chile, Argentina and the Caribbean; and, in Santiago, Chile, the Ford Foundation’s representative for the Andean and Southern Cone countries. He has a doctorate in

economic development from the University of Pittsburgh and has written extensively on democracy and development in Latin America and the Caribbean.

Beryl Levinger

Director, Center for Organizational Learning and Development (COLAD), 

Education Development Center 

Newton, Massachusetts

e-mail: blevinger@edc.org

Beryl Levinger’s academic focus is the evaluation and management of international non-governmental organizations, particularly those engaged in sustainable development. In a typical year at COLAD, she works with approximately 50

development-oriented NGOs, government agencies and multilateral institutions

to assess and strengthen institutional capacity. Additionally, she is a distinguished professor of nonprofit management at the Monterey Institute of International Studies. As a veteran practitioner with more than 30 years of experience

in nonprofit management and international education, she has held leadership

positions with the American Field Service Intercultural Programs, CARE and InterAction. She is currently directing a study for AID assessing and documenting

the capacity-building efforts of 30 international nonprofit organizations the

agency supports, a project which has already produced a comprehensive database. Dr. Levinger is co-author of Toward the New School (Hacia la Escuela Nueva),

published by the Colombian Ministry of Education in 1977, which helped create

the framework for Colombia’s acclaimed Escuela Nueva movement. Her most recent book is Critical Transitions: Human Capacity Development Across the Life Span.

Panelists’ Biographies 81
Patrick Breslin

Director of External Affairs, Inter-American Foundation

Arlington, Virginia.

e-mail: pbreslin@iaf.gov

Patrick Breslin, now director of external affairs for the Inter-American Foundation, previously served the IAF as research director as well as foundation representative for Honduras and Colombia. In addition to two books, his publications

include articles and reviews for several national magazines and newspapers. He

has a doctorate from the University of California at Los Angeles, and he served

as a Peace Corps volunteer in Colombia.

René Canjura

Mayor of Nejapa,

Nejapa, San Salvador, El Salvador

e-mail: alcaldianejapa@netcomsa.com

René Canjura has been re-elected mayor of Nejapa municipality for several

consecutive terms. As a member of the Farabundo Martí Front for National Liberation, he serves on his party’s Transition Committee. He is past-president of the

Cooperación de Municipalidades [Cooperation of Municipalities] of the Republic of

El Salvador (COMURES). Mr. Canjura holds a B.A. in philosophy from the University of El Salvador and has taken many courses on cooperative and labor

union movements, human development and international law.

Ernesto Barrientos

General Manager, Embotelladora Salvadoreña, S.A.

San Salvador, El Salvador

Fax: (503) 211-2251

Ernesto Barrientos has a B.S. in mechanical engineering from the University

of Houston and an M.B.A. from the Universidad Francisco Marroquín. He serves

on the board of directors of the company he has managed since 1975, as well as

on the boards of Corcho y Lata, S.A.; Industrias Cristal, S.A.; Rensica, S.A.; Aurora, S.A.; Industrias Soyapango, S.A.; Telsinca, S.A.; and C.V. Mensajeros de la

Paz. From 1983 to 1986, he was the director of the Chamber of Commerce of El

Salvador.

Antonio Orellana

Chair, Board of Directors, Asociación de Concertación para el Desarrollo 

de Nejapa [Nejapa Association for Concerted Action for Development]

Nejapa, San Salvador, El Salvador

Fax: (503) 201-00-61

Antonio Orellanas is chairman of the board of directors of the Nejapa Association for Concerted Action for Development. From the 1980s to 1994 he

worked to promote health care in rural communities. In 1994, he became a

grassroots leader in Nejapa, where he rose to prominence in the local planning

process organized by the municipality. Since its founding, he has represented

local civil society on the board of directors of the Fondo para el Desarrollo Local de

Nejapa [Nejapa Local Development Fund]. 

Francisco Antonio Mancía

Manager, San Andrés Training Center, Fundación Salvadoreña para 

el Apoyo Integral [Salvadoran Foundation for Integral Support] (FUSAI) 

82 Building Democracy from the Grassroots
San Salvador, El Salvador

e-mail: fusai_sanandres@telesal.net

A licensed architect with an M.A. in financial administration, Francisco Antonio Mancía has been a United Nations Development Program official, supporting processes of technical assistance to local governments for the generation of

employment, municipal ordinances, and mobilization and coordination of resources. He has also worked as a project officer with the U.N. World Food Program and on the institutional strengthening of various nongovernmental organizations financed by AID. Mr. Mancía has given many presentations at forums

and conferences.

Marcos Rodríguez

Program Director, Fundación Nacional para el Desarrollo 

[National Development Foundation] (FUNDE)

San Salvador, El Salvador

e-mail: rodriguezvillalta@salnet.net

Marcos RodrÌguez, who has broad experience in implementation of local development projects, has spoken at international conferences and written books

and articles on grassroots organizations and alliances among sectors. His specialty is the promotion of a leading role for grassroots organizations and building alliances among the social sector, local government and business. He studied

at the University of Stockholm and at the Salvadoran Lutheran University and

has a B.A. in economics. He also holds the title of “local development expert”

from the United Nations’ International Labor Office.

Jaime Torres Lara

Executive Direcor, Centro Latinoamericano de Capacitación y Desarrollo 

de los Gobiernos Locales [the Latin American Center for Training and 

Development of Local Governments] (CELCADEL)

Quito, Ecuador

e-mail: jtl@iula.net

Jaime Torres Lara, who has headed CELCADEL since its founding in 1983,

oversees all of the Center’s projects financed with support from the Inter-American Development Bank, the World Bank, AID, the European Community, the

Canadian Federation of Municipalities, the Swedish International Development

Agency and the Dutch government. He is also founding director of the magazines Democracia Local [Local Democracy], Iula Informa [Iula Informs] and Poder

Municipal [Municipal Power] as well as the author of many articles and papers.

Mr. Torres Lara’s degree is in sociology, and he has taken many international

courses and seminars related to the management, operation and maintenance of

municipal services, among other subjects.

Ronald MacLean Abaroa

Former Minister of Sustainable Development and Planning, 

Republic of Bolivia

La Paz, Bolivia

e-mail: mzeballos@cocrd.rds.org.bo

Ronald MacLean Abaroa served in the recent administration of Bolivian

President Hugo Banzer as minister of sustainable development and planning,

minister of the treasury and head of the economic cabinet. Between 1978 and

1999, he was Bolivia’s minister of foreign relations, its minister of planning and

Panelists’ Biographies 83
coordination, vice president of the La Paz City Council and, four times, mayor of

La Paz. He has worked for Harvard University’s Institute for International Development on the project for Central America as senior researcher on institutional

reform and governability. A founding member of Transparency International, he

is co-author (with Robert Klitgaard and Lindsay Parris) of Corrupt Cities: A Practical Guide for Cure and Prevention, which is among the World Bank bookstore’s five

best sellers. Mr. MacLean Abaroa graduated in economics from the University of

Maryland in 1970 and attended the Kennedy School of Government of Harvard

University where he received his M.A. in public administration in 1980. He

heads his own consulting firm, MacLean Abaroa Consultants, Inc., and has been

an advisor to the World Bank, the Inter-American Development Bank, the Organization of Cooperation and Economic Development, and the governments of

Bolivia, Chile and Colombia.

Darcy Ashman

Independent Consultant

Boston, Massachusetts

e-mail: djash3@aol.com

Darcy Ashman is a researcher and consultant on alliances, networks and

partnerships for sustainable development and democratization. Her nearly 20

years of experience with civil society organizations and networks include such

initiatives as the International Forum on Capacity Building in India, El Taller in

Tunisia, and the Global Partnership in Bangladesh, Zimbabwe and the United

States. She has presented her research at numerous international conferences

and in articles published in World Development and Nonprofit and Voluntary Sector

Quarterly. Dr. Ashman received her doctorate in organizational behavior from

Boston University and an M.A. from the Fletcher School of Law and Diplomacy

at Tufts University.

Anne Marie Blackman

Senior Specialist, Unit for the Promotion of Democracy, 

Organization of American States

Washington, D.C.

e-mail: ablackman@oas.org

Anne Marie Blackman is responsible for a program for cooperation in decentralization, local government and citizen participation. At the OAS, she has also

worked as advisor on Haitian affairs in the Office of the Secretary General and as

executive assistant to the assistant secretary for management. From 1982 to

1991, she was assigned by Barbados’ Foreign Ministry to diplomatic and consular

posts in Caracas, Barbados and Washington, D.C., and to Barbados’ delegation to

the OAS. Mrs. Blackman, who speaks English, Spanish, French and Portuguese,

has a B.A. in languages from Heriot-Watt University in Edinburgh, Scotland, and

an M.S. in administration from the University of Central Michigan. She has written and edited publications on topics related to democracy.

84 Building Democracy from the Grassroots
The Organization of American States

The Organization of American States (OAS) is the world’s oldest regional organization, dating back to the First International Conference of American States,

held in Washington, D.C., from October 1889 to April 1890. At that meeting,

the establishment of the International Union of American Republics was approved. The Charter of the OAS was signed in Bogotá in 1948 and entered into

force in December 1951. The Charter was subsequently amended by the Protocol

of Buenos Aires, signed in 1967, which entered into force in February 1970; by

the Protocol of Cartagena de Indias, signed in 1985, which entered into force in

November 1988; by the Protocol of Managua, signed in 1993, which entered

into force on January 29, 1996; and by the Protocol of Washington, signed in

1992, which entered into force on September 25, 1997. The OAS currently has 35

member states. In addition, the Organization has granted permanent observer

status to 49 states, as well as to the European Union.

The essential purposes of the OAS are to strengthen peace and security in

the hemisphere; to promote and consolidate representative democracy, with due

respect for the principle of nonintervention; to prevent possible causes of difficulties and to ensure peaceful settlement of disputes that may arise among the

member states; to provide for common action on the part of those states in the

event of aggression; to seek resolution of political, juridical, and economic problems that may arise among them; to promote, by cooperative action, their economic, social and cultural development; and to achieve an effective limitation of

conventional weapons that will make it possible to devote the largest amount of

resources to the economic and social development of the member states.

The Organization of American States accomplishes its purposes by means of

the General Assembly; the Meeting of Consultation of Ministers of Foreign Affairs;

the Councils (the Permanent Council and the Inter-American Council for Integral

Development); the Inter-American Juridical Committee; the Inter-American Commission on Human Rights; the General Secretariat; specialized conferences; specialized organizations; and other entities established by the General Assembly.

The General Assembly holds regular sessions once a year. Under special circumstances it meets in special session. The Meeting of Consultation is convened

to consider urgent matters of common interest and to serve as Organ of Consultation under the Inter-American Treaty of Reciprocal Assistance (Rio Treaty), the

main instrument for joint action in the event of aggression. The Permanent

Council takes cognizance of such matters as are entrusted to it by the General Assembly or the Meeting of Consultation and implements the decisions of both organs when their implementation has not been assigned to any other body; it

monitors the maintenance of friendly relations among the member states and the

observance of the standards governing General Secretariat operations; and it also

acts provisionally as Organ of Consultation under the Rio Treaty. The General

Secretariat is the central and permanent organ of the OAS. The headquarters of

both the Permanent Council and the General Secretariat are in Washington, D.C.

MEMBER STATES: Antigua and Barbuda, Argentina, The Bahamas (Commonwealth of), Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia,

Costa Rica, Cuba, Dominica (Commonwealth of), Dominican Republic,

Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica,

Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia,

Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, United

States, Uruguay and Venezuela.

The Organization of American States 85
The Inter-American Foundation

The Inter-American Foundation is an independent foreign assistance agency

of the United States government, working to promote equitable, responsive and

participatory self-help development in Latin America and the Caribbean. According to Part IV, Section 401(b) of the Foreign Assistance Act of 1969, the enabling

legislation “it shall be the purpose of the Foundation, primarily in cooperation

with private regional, and international organizations, to:

• strengthen the bonds of friendship and understanding among the peoples

of this hemisphere;

• support self-help efforts designed to enlarge the opportunities for individual development;

• stimulate and assist effective and ever wider participation of the people in

the development process;

• encourage the establishment and growth of democratic institutions, private and governmental, appropriate to the requirements of the individual

sovereign nations of this hemisphere.”

The guiding principles of the Inter-American Foundation are to support people, organizations and processes; channel funds directly to the non-governmental sector; promote entrepreneurship, innovation and self-reliance; strengthen

democratic principles; empower poor people to solve their own problems; and

treat partners with respect and dignity.

Congress appropriates funds annually for the Inter-American Foundation.

The IAF also has access to the Social Progress Trust Fund administered by the

Inter-American Development Bank. The Fund consists of payments on loans the

U.S. government originally made under the Alliance for Progress to various Latin

American and Caribbean governments. Since 1972, the IAF has funded 4,306

grants totaling $514.3 million. Some have been awarded to community organizations such as agricultural cooperatives or small, urban enterprises; others to

larger, intermediary organizations that have provided beneficiary groups with

credit, training, and technical and marketing assistance. 

The Inter-American Foundation has been a leader in helping the nongovernmental sector evolve as a critical factor in the sustainable development of Latin

America and the Caribbean. Together, the IAF and its grantees have created an

experimental laboratory for testing cost-effective, participatory models of social

and economic development. These have often been replicated and expanded by

government and larger donor agencies, improving the quality of life for hundreds of thousands of poor families throughout the hemisphere.

86 Building Democracy from the Grassroots