TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-12-28 Page is: DBtxt003.php L0901-FFD-TDUD-2018-110000

BURGESS MANUSCRIPT
FIXING FAILED DEVELOPMENT
Turning Development Upside Down

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Chapter 11
MULTI SECTOR LINKAGES

Community is the best focus for development ... this is where people live and where quality of life matters. Community centric metrics show how effectively resources are being used, not only those from external sources, but also local resources.

Modern economics

Modern economics seems to embrace the idea that there are a lot of linkages within an economy, and throughout the international economy. However, the study of econometrics is largely the study of models to simulate the actions that take place in the economy at the national and sector levels rather than from the community perspective

I have argued for a long time that these models were inefficient because they were usually studying the wrong things. The statistics is sophisticated, but the social equivalent of industrial engineering is absent, and most of the decisions arising from this econometric analysis tends to ignore the dynamic of the community

When the linkages in a community are analyzed it becomes apparent what it is that is constraining the community, and what there is that might be opportunities for the community.

Linkages and community

The importance of linkages between the various sectors was recognized in the earlier work. But what was not taken enough into consideration was the importance of value chain. There are more or less important linkages between people, communities, organizations, projects, sectors and functions ... but they remain theoretical constructs until there is an understanding of the value chain, and structures that can take advantage of the value chain.

It is said that “All politics is local” and I like to say the “All life is local”. Quality of life is something that is determined as much as anything by what goes on in our own community. What goes on at any distance from my community may be interesting, and may have an indirect impact, but is nowhere as near as important as what goes on in my community.

And within my community, my family is far and away the most important. To the extent that people are interested in far away places, it is often because a family member is there.

Linkages ... chaotic multi-sector dynamics

There are many linkages between people, organizations, projects, sectors and functions in any society, and it is at the community level that they have some chance of being understood. The linkages are chaotic and always changing ... but at the community level can be managed to help socio-economic progress.

By moving from donor centric development to community centric development, the performance of the relief and development sector can be improved substantially. A community centric development focus is a better way to approach development. It puts community needs as the priority and power into the hands of local people.

In a community there are usually a number of different sectors at various stages of development. Some sectors have potential, others do not. Some sectors are needed to support other sectors ... development of one sector is a prerequisite to success in another sector. It is not rocket science, but simply advanced common sense. Planning should take into consideration the considerable interplay and linkages between the sectors. A key sector that is non-performing can be a severe constraint on the overall success of the community.

Success with a multi-sector focus

Most community development “projects” do not have much thoughtfulness about how best to use scarce resources. I have helped evaluate hundreds of projects, and almost all of then failed because they were limited to a single sector, and though well designed with respect to the sector, ignored the realities of failure in the other sectors.

One great success was an FAO fisheries community development project in Shenge, Sierra Leone. It was multi-sector and implemented with continuous performance improvement for the community. It would have created an amazing level of durable value for the community if the country itself had been sustainable. This project took resources and made the best possible use of them. It was wonderfully successful ... so much so that the two expatriate CTOs were honored with chieftaincies by the local community. This project worked on the basis of doing what is best for the community ... using scarce resources in the best possible way, and the results were remarkable.

The FAO Project in Shenge, Sierra Leone
I had the good fortune to do the evaluation of a wonderful FAO project in Shenge, Sierre Leone some years ago (around 1989 I think). This project used its rather limited resources and created community benefit that was perhaps as much as 100 times more than was anticipated for the project. How was this achieved? Two very competent Chief Technical Officers (CTOs) controlled the money and used it to do what would deliver a lot of value in the community ... and people paid for it. Economics 101 says, if I remember well, that price is determined by supply and demand. If you offer something that has a good value, people will pay for it, if they possibly can. So everything done by the project had a price, and to the extent that it was valuable people paid for it.

The project had a valuable inventory of spare parts for fishing boats and outboard motors, and fishing gear. These were not given away, but sold at the local market prices with the money flowing back into the project. The project bought more inventory, and expanded to have a fuel store with a substantial inventory. The fisherfolk went fishing much more rather than having to spend valuable time hunting for fuel, gear and spare parts. The project trained a mechanic to fix outboard motors, and in turn this mechanic started to train other young men to be mechanics. His salary was paid for by small fees paid by the students, and all of them (teacher and students) made money being paid to service the outboard motors in the community.

The same dynamic took place in the fish smoking area. The project was meant to teach six local women about fish smoking, but an initial six had expanded into a group of 60 who were learning new skills and applying them in the market, and prospering. More fish were being caught. More fish were being processed for the market. The community was on its way.

But the community needed to expand its horizon. The road was impassable in the wet season, and the government was not maintaining the road. The government had a road crew in the area, but not paid all the time and never with any material for repairs. Courtesy of the project resources, some modest amount of gravel and cement was obtained, culverts were installed and the road was made functional. The fisherfolk and traders later paid back the project.

What else could the project do? The IDA school built some years before and idle for years because of government budget constraints had great facilities, but no operating funds. The project started to run evening courses at the school using the facilities including electric generators, carpentry and metal working shops, sewing equipment, etc. with people in the village learning and earning at the same time, and the project being paid so that the project could pay ... and never have to stop.

Sectors

There are many sectors involved in a successful community development, these include the public and the private sectors, the formal and the informal sectors, the production, infrastructure, service and social sectors, governance and so on. In the production sector there are, inter alia: agriculture, manufacturing, construction and more. In the infrastructure sector there are roads, seaports, telecom, airports, water, etc.. In the services sector there is banking, transport, trade, religion, tourism and more. In the social sector there is education and health.

Sectors are a somewhat artificial construct, but they do serve to help organize thinking and the specialized expertise needed in that area of socio-economic activity.

Much more information about sectors is set out later in the book.

Functions

Within a community, an organization and a sector there are a number of common functions. Functions are the activities that are needed in a community, organization or sector that have common characteristics. Accounting for example is a function that exists in communities, organizations and sectors. Marketing is a function. Transport is a function, as well as being a sector. Thus, an ambulance is part of the transport function in the health sector. The success of relief and development and socio-economic progress depends on how all of this comes together.

Organizations

More than anything else any organization is people ... the human resource element of an organization is its most important component. An organization is really not much more than a container that makes it possible for people to function as a team and to have access to tools and resources that make it possible to do things that cannot be done individually.

When people stop being involved with an organization, it loses a lot ... most of all it loses a lot of its energy. Organizations need people ... either the staff of the clients in order to be meaningful.

Helping organizations to have staff come to work, and clients come ... students to school, patients to clinics ... is very important.

All sorts of organizations

There may be thousands of communities, but there are a lot more organizations. Every community has a few ... formal and informal. There are organizations, big and small, that help to do everything.

There are all sorts of organizations. In rural areas the dominant form of business is the family business where almost everyone is trying to make ends meet in agriculture on a small amount of land with not enough water. In urban areas, a lot of people are engaged in informal petty trade and service work.

I have had the good fortune to visit and spend time in a lot of remote communities ... mainly in Africa, but also in Latin America and in South Asia. I was in these communities in connection with refugee movements, drought, attempts at community planning, assessment of project performance ... all sorts of reasons.

One thing I learned was that what appears at first sight to be a simple small community has all sorts of organizations and activities that are critical to its present situation and future performance. Development that ignores this, does so at its peril.

Governance - Governing Body

A community, no matter how small, is likely to have an organization of some sort that is the governing body. It might be quite informal, or quite organized. In many communities, the organizing body in some ways represents the community, and holds office with the assent of the people. Some of the traditions of these governing units go back a very long time.

In some places there may be local organizations that are affiliated in some ways with national organizations. Local political organizations can have this characteristic. In some places there may be a revenue department that arranges for taxes to be levied. Taxes can be raised in many different ways, often on trade and the movement of goods. The amounts can be sufficient to provide for many local needs.

Business Organizations

While most economic activity is likely to be in the informal sector, it is possible that there will be activity undertaken by a larger business organization. A larger business organization should be engaged with development activities in the community. The contribution of a larger business entity to the community should be the subject of value analysis so that there is some equity between the value created and the value shared with the community.

Religious Organizations

Religious organizations of some sort exist in communities. They are one of the stronger links between local organization and organization that spreads nationally and internationally. Local religious groups can be a valuable resources for local activities. I have been impressed how religion has a role in all communities, even those in the direst poverty. Religion ought to be a force for good, and in broad terms I argue that religion has an important role in society as part of the foundation for ethics. But the history of religion being used to foment trouble also is a reality. Religion and freedom together work well and need to be encouraged. Most people who practice their religion are good people with values that are universally common.

Self Help Groups (SHGs)

The community probably has organized itself to have Self Help Groups (SHGs) that do collectively what individuals cannot do on their own. This applies in the area of microfinance, and also many other informal economic activities.

Health - Hospitals and Clinics

Some health organizations are likely to be in the area ... perhaps a health clinic, but perhaps some distance from the community ... perhaps just a nurse who lives in the community.

Education - Schools

Perhaps there are schools in the community ... perhaps there are schools in the area, but some distance from the community. Perhaps the only education is provided by parents.

Telecenters

A growing number of communities are finding ways to have some organization build a telecenter in the community so that there is access to the Internet and all the services now being made available with Internet access.

Water Committees

Perhaps there is water committee to manage and maintain the water supply for the community ... maybe this is done by the community as a whole. Maybe the water is just for household use, or maybe it is also used for irrigation.

People to People Networks

It is difficult to have constructive connections with people unless there is some organization, network or community to serve as a focus. The idea of “people to people” contact is good, but difficult to organize and manage. But it becomes more practical when there is community, network or organization also involved. There is considerable experience with networks and organizations, but rather less with communities, yet it is communities that are likely to be the most effective.

Organizations for Community Security

Organizations for community security are needed. The local police ought to be such an organization, and good police can be. But it is likely that more is needed than just the police. Local people have to be a part of the solution as well. Some security activities can reasonably be provided by civilian security companies, but they should be very limited in their mandate, and should be working within strict guidelines prescribed by law and the community authorities. People working through local committees can be very powerful in gaining control of communities and making them peaceful ... especially women and respected family people.

Courts and a Justice System

A functioning justice system helps to maintain security and a civil society. Small criminal activity is wrong, and should be punished in an appropriate way before it leads to bigger and badder things. Experience shows that taking care of little things helps prevent more anti-social behavior later.

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