There is a considerable body of empirical evidence that shows the need to work collaboratively with local institutions to achieve sustainable improvements in rural poverty reduction and management of natural resources (Narayan et al 2000, Uphoff et al 1999, Selener et al 1997, Baland and Platteau 1996, World Development 1993, Korten 1990, Esman & Uphoff 1984, also research described in Annex 1). Indeed, this viewpoint is quite widely accepted in the development field, and has contributed to an increasing delegation of responsibility for local and regional development to local governments, NGOs, other organized sectors of civil society and, to a lesser extent, to traditional institutions and authorities.
In practice, working with local institutions is quite complex. Just defining local institutions, and distinguishing these from "social capital", for instance, has occupied the minds of many scholars. In an applied context, there is a tendency to oversimplify the "legitimacy" that local institutions enjoy in society, as well as their traditional and emerging roles, and the attributes they bring to any collaborative process or project1. Moving beyond the conviction that working with local institutions is critical for achieving sustainable local development, to successful collaboration and outcomes, is a major challenge.
This paper is aimed at helping development planners, practitioners and policy-makers to meet this challenge by sharing the findings and policy implications of research conducted on local institution - rural household linkages. The findings derive from an FAO research project undertaken by the Rural Institutions and Participation Service (SDAR) entitled "Rural Household Income Strategies for Poverty Alleviation and Interactions with the Local Institutional Environment"2. Following a methodology developed by the project coordinators at FAO, three country studies were undertaken in India, Mozambique and Mexico by local research teams, resulting in a series of final reports3. This paper summarizes the research results and provides empirical examples of how local institutions function in rural society, shedding light on effective ways for development practitioners to engage local institutions in working partnerships. More in-depth information was gathered on six of the more important local institutions identified by the research teams (Annexes 4-9). Finally, to widen the scope of institutions covered in this paper, three additional institutional profiles were commissioned from Dr. Anirudh Krishna, a well-known expert on the topic of civil society and rural development (Annexes 10-12).
The paper argues that local institutions, however "imperfect", are providing essential goods and services to the rural poor and vulnerable groups, particularly in the absence of well-functioning markets, local governments and safety nets. Therefore, great caution should be taken not to destroy these networks and arrangements in the name of "development". It also argues that homogeneous and heterogeneous local institutions play different but complementary roles in rural societies. While the former are more inclusive, the latter may be more effective at moving the poor upward and potentially out of poverty. In conclusion, the paper calls for a strong policy and programming commitment to strengthening and capacity building of (selected) local institutions in key process and substance skills. Doing this effectively - by capitalizing on local strengths, will require a long-term commitment.
The rest of the paper proceeds as follows. Section 2 defines and compares the key terms: local institutions, social capital and sustainable livelihoods. Section 3 briefly reviews the research findings on livelihoods and local institutions from the India, Mozambique and Mexico pilot projects. Section 4 examines the attributes of nine very different local institutions, and their linkages with household livelihoods and rural poverty. Section 5 presents key analytical conclusions from the field research. Section 6 offers policy guidance for working effectively with specific types of local institutions and then concludes. There are ten annexes: Annex 1 briefly describes complementary research programmes; Annex 2 and Annex 3 provide policy guidance from a Mozambique seminar and the Indian field team, and Annexes 4 - 12 are the complete institutional profiles synthesized in Section 4.
