June 2008 · Number 125 46974 A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region. Rural Poverty Reduction in Northeast Brazil Achieving Results through Community-Driven Development Luis Coiroloa and Jill Lammertb Over the past two decades, Brazil has been employing a poverty is not merely very innovative community-driven development (CDD) a lack of income, approach to reducing rural poverty in its Northeast re- but also of access to gion. These efforts began with a relatively small pilot economic and social in the late 1980s, which was then extended to the entire services, as well as a Northeast region in the early 1990s. Emboldened by lack of empowerment, early results on the ground, the State and Federal govern- opportunity, security ments have since continued to steadily scale up this CDD and participation. The program, known in Brazil as the Programa de Combate focus on rural poverty à Pobreza Rural (PCPR, or by its English acronym of reduction, in Brazil and elsewhere, has tended to be a RPRP, Rural Poverty Reduction Program), to the point post-World War II phenomenon, with growing intensity where it is now reaching some 11 million people. The since the early 1970s. Early sector-specific strategies process has been one of continual piloting, refinement (irrigation, rural transport, extension and research, etc.) and expansion, underpinned by very active monitor- tended to be followed or complemented by more holistic ing and evaluation efforts by the government itself, the Integrated Rural Development (IRD) programs. While World Bank as the primary external partner, foreign and the former often failed to capture the inter-relation- local NGOs and academics. ships between problems in different sectors, the latter suffered from complexity and delivery problems in ad- The PCPR in Perspective ministratively weak settings. Perhaps more important, The Northeast of Brazil has an area similar to that of most of these efforts were state-led and executed, and France, Italy, Germany and Spain combined and a popula- failed to harness the potential of rural beneficiaries to tion of around 48 million. Some 20 million are rural in- set their own priorities, manage resources, execute and habitants, of which three-fourths are considered poor. The help to maintain projects. Consequences often included program operates on a very large scale, having reached a misalignment between investments and beneficiaries' some 38,000 community associations, working through own perceived priorities, excessive expenditures on ad- participatory councils in over 1,500 of the 1,686 mu- ministration and other overheads, weak ownership and nicipalities in the region. PCPR has financed more than commitment at the local level to support and maintain 50,000 community sub-projects, for a total investment of investments, and failure to address the empowerment di- US$1.4 billion, and independent evaluations suggest quite mension of rural poverty. significant results. A recent book1 explores lessons learned over the past twenty-five years and suggests that he Brazil- What is different about the PCPR experience? When ian experience may have relevance for other countries. PCPR began in earnest in the early 1990s, `community- driven development' was still a relatively new concept, The emergence of CDD both in the World Bank and elsewhere, and it had its share of skeptics. However, as the evidence of success Development practitioners have come to understand that has mounted, support for the CDD approach has grown, 1 "Rural Poverty Reduction in Northeast Brazil: Achieving Results through Community-Driven Development", July 2008, forthcoming World Bank especially at the level of the Northeast states where resources, active community participation, partnership commitment to the PCPR today cuts across the entire with local authorities and civil society, transparency, and political spectrum. The PCPR has empowered com- simplicity and clarity of program `rules of the game'. munities to take control of their own development and These rules include (i) the requirement to implement an work in partnership with government, the private sec- information campaign about the program in a way that tor and civil society to design and implement invest- reaches even the poorest and most excluded rural peo- ments that respond to actual demand on the ground ple; (ii) the preparation of an Operational Manual which and fit the local context. It has decentralized program governs all aspects of the project and should be simple coordination to the lowest appropriate level of govern- enough to be usable by all program participants; (iii) ment, which has made management less complex and verification that the community association is part of the improved targeting. Funds are transferred directly to target group, that sub-project requests reflect the priori- community associations, which also take charge of ties of the community as a whole, that all members have project execution. As mentioned above, PCPR is now participated in the decision-making process, that the operating on a very large scale; it finances a wide vari- community association knows how to contract potential ety of investments and services in a cost-effective man- providers of goods and services for implementation, and ner; the prospects for sustainability are quite strong; has a plan for operations and maintenance. and the institutional mechanisms developed under the PCPR have had an important impact on the local gov- Key Actors and their Roles. ernance environment and are increasingly being used The main actors involved in the PCPR are the Commu- for priority setting and delivery of non-PCPR invest- nity Associations (CAs, self-selected groups of people ments. As an example, at the time the book was being who have identified common needs), participatory Mu- prepared, one of the States estimated that for every nicipal Councils (MCs) and State-level Technical Units US$1 of PCPR financing, these institutional arrange- (STUs). The individual CAs identify community invest- ments would be used to channel an additional US$5 of ment needs and prepare funding requests with technical non-PCPR programs in rural areas. assistance financed by the program and contracted by the communities themselves. The MCs--which consist How does the PCPR work? of 80 percent representatives of communities from that The program has three main components: community municipality and of civil society and 20 percent gov- investments, institutional development or technical ernment representatives--receive the proposals from assistance, and program administration. Over 90 per- the CAs, analyze them, verify the CAs' eligibility and cent of the total project cost goes to the community the participation of all their members in the decision- investment component, which channels funds directly making process, and prioritize the proposals. The STU to community associations through matching grants. supervises the functioning of the MCs and reviews and The community investments are managed through one approves the proposals from a technical standpoint. of three delivery mechanisms--PAC (Community The STU then enters into agreements with the CAs and Support Program) , FUMAC (Municipal Community transfers resources for implementation to them. The Support Program) , and FUMAC-P (Pilot Municipal CAs manage the sub-projects, under the supervision of Community Fund)--successive programs that have the MCs and STU. built on the lessons of the previous one and which are increasingly decentralized. Regardless of the delivery Results So Far mechanism, PCPR runs on a set of clear and enforce- After 15 years, the program now operates in 89 percent able "rules of the game" which promote access to in- of the municipalities in the Northeast. These investments formation, the cooperation/participation of all project and related technical assistance have benefited roughly stakeholders, transparency of decision-making, and 60 percent of people living in the rural Northeast empowerment at the local level. through at least one PCPR investment. The PCPR has some basic Principles and Operational The majority of funds invested through PCPR have `Rules of the Game'. The basic principles that guide financed small scale infrastructure, especially rural wa- the PCPR include: decentralization of decision mak- ter supply and electrification. Over the history of the ing and implementation, beneficiary management of program, 800,000 families have benefited from US$235 2 · June 2008 · Number 125 million investment in 13,600 water supply projects. sub-project types prioritized by the community associa- Some US$ 367 million has been invested in 15,000 rural tions. The incidence of productive sub-projects focusing electrification projects benefiting close to 650,000 thou- on increasing incomes and employment rose from an sand families and providing energy to many rural schools average of 20% during 1993-2005 to 35% in 2006-2008. and community centers. Three-fifths of the rural house- Equally important has been (b) the emphasis on forging holds in the Northeast, which gained access to water and linkages between small producers and national super- electricity between 1992 and 2003 alone, obtained that market chains and markets in Europe and the US. The access through the PCPR. fact that more than 1,000 community associations are already exporting to the European and US markets, and The range of community investments and services sup- a similar number of communities are selling to national ported by PCPR is diverse. PCPR includes only a small supermarket chains, clearly indicates that small farmer "negative list" of options that cannot be funded under community associations can benefit from the globaliza- World Bank policy (e.g., weapons, religious or political tion phenomenon if they are organized and know how to investments), thereby leaving the communities the broad- go about doing so. Also noteworthy is (c) the increasing est possible discretion in defining their priorities. Over use of the PCPR's participatory institutional mechanisms the period 1993-2005, 75 percent of the investments (community associations and Municipal Councils) for the have been for basic infrastructure, 20 percent have sup- delivery of other non-PCPR state and federal programs, ported productive projects, and 5 percent went to social thereby scaling-up the impact of the program beyond the sector areas. Evidence shows that PCPR investments cost Bank-financed projects. (at equal or better levels of quality) 30 to 40 percent less than most tradi- The importance of this program is that . . . wherever [it] goes, that region is tional supply-driven programs imple- changed, whether in terms of infrastructure or in the way things are done. For mented by public sector agencies. example, when the program brings a tube well to a community, we can see that people who have never in their lives had a vegetable in their house now In addition to improving the living have tomatoes, cilantro, mango, okra, everything . . . conditions of the rural poor, project --Interview, Antonio Ivo de Medeiros, Mayor of Santa Luzia evaluations2 indicate that the PCPR has encouraged the inclusion of mi- nority groups such as women, indigenous communities and quilombolas (communities of descendents of Afro- Conclusions Brazilian freed or escaped slaves). Probably the most For over 30 years, the Government of Brazil and the salient result coming out of the analysis of the PCPR World Bank have evolved an approach to poverty reduc- relates to the very positive evidence that it is creating tion through experimenting and learning what works. strong and sustainable social capital in participating rural communities. This, in turn has positive implications for Through its participatory mechanisms and by scaling up strengthening public governance at the local and mu- to every State in the Region, the program has created im- nicipal levels. This also supports the view that there are pressive institutional machinery for local and community replicable lessons to be learned for other countries (see development. In addition to empowering the beneficiaries Box 1). and tapping a remarkable and previously unexploited community capacity to implement investments, the Pro- Latest Developments. gram has built significant social capital within communi- Although the book focuses on the period 1993-2005, sev- ties and municipalities which has in turn has improved eral important developments have been taking place since local governance and reduced corruption. then, which deserve special mention. During 2006-2008, the program financed some 4,000 additional sub-projects By the same token, the Municipal Councils have played for about 3,300 community associations and benefiting a critical role in the transparent and participatory allocation a further 200,000 families (or about 860,000 people). of resources from the Bank-supported program. They have Observable trends include: (a) a shift in the profile of improved targeting, prioritization, and integration of these 2. From the outset, the Project has been the subject of various studies and critical analyses. This literature has been recently summarized in the report, "Rural Poverty Reduction Program in Northeast Brazil Evaluation 1993-2005", World Bank, 2008. The report included a new study using a "quasi-experimental" design and methodology to rigorously evaluate the direct impact of the Program on infrastructure, health, and physical and social capital, which other studies have not rigorously analyzed. June 2008 · Number 125 · investments with other investments in the municipality the preparation, processing, packaging, and transport of financed from other sources. products. The same principles apply for the supply to lo- cal supermarket chains. It is expected that over the next The challenge now is to transform the social capital three to five years, thousands of community associations created in community associations into economic will be connected to the local and international markets. capital for the region. develop their products and link them to markets, including both the export Summing it all up, the Brazilian experience has dem- market and national and regional markets. The ap- onstrated, and continues to affirm on a very large scale, proach being used links the community association that, given the chance, poor people can do much more to directly to the buyers, with them (or their represen- solve their own problems than many development practi- tatives) providing technical assistance in terms of tioners and governments assume. Box 1 ­ Can this work in other countries? Representatives of governments, NGOs, and the private sector from a great variety of countries have visited the Northeast Rural Poverty Reduction Program, including the community-based land programs. At the same time, members of the Bank's Northeast team have participated in designing CDD programs in many countries, including, Argentina, Bangladesh, Ghana, Mexico, Mozambique, Nepal, Philippines, and Sri Lanka. Visitors first arriving in Brazil and officials welcoming Northeast team members to their countries, often remark that this type of program works well in Brazil, because it is a richer and more developed country with a longer tradition of democracy, and community organizations have been operating there for a very long time. After the visits, skeptical officials recog- nize that, while Brazil may have a higher per-capita income, the pervasiveness of inequality and poverty, especially in the rural Northeast, is not unlike conditions in their own countries. As a result of these visits, some have moved to design and begin to implement CDD programs of their own. Some emerging general principles include: · Communities in the driver's seat. When the community association contracts service providers for technical assis- tance and implementation, the results are normally less expensive, and often of better quality than similar invest- ments executed by the public sector. These investments give the community a sense of ownership, which results in much better maintenance of investments. · Building self-worth. Perhaps the most important element of the Brazilian CDD Program is that community associa- tions have a bank account, manage financial resources, and implement activities they never imagined they would be able to do. These responsibilities bring empowerment and a sense of self-worth to communities as they shoulder them. · High-level political support. Government commitment at the highest level and the perceived need to obtain results on the ground are essential conditions for getting positive results with the CDD approach. In Brazil, the Governors of each of the ten participating States bring this commitment through their advocacy, by providing counterpart funding, and by selecting qualified and dedicated technical unit staff to coordinate the program and enforce the rules of game. · Simple, enforceable Program rules. The principle that the rules of the game should be few and enforceable seems to yield similar results across countries. The central requirement is for direct transfer of resources to beneficiary groups, comprising target group members--all of them participants in decisions about their community's invest- ment priorities. After that, the next most important rule is that beneficiaries understand and agree among themselves how they will go about finding and contracting for technical assistance to prepare and implement proposed invest- ments. There must also be clear agreement among them on how they will maintain the investments. All these ele- ments must be taken into consideration when evaluating a community's commitment and capacity to implement an investment. Local authorities should participate in the Program (important to ensure long-term institutional sustain- ability), but the decision-making process must be fully participatory and beneficiary-led. About the Authors a. Agricultural Economist, former World Bank Lead Sector Specialist for Rural Development for Latin America and Caribbean Region, and currently consultant to the World Bank, b. Education and Human Development Specialist, Consultant to the Bank "en breve" is produced by the Knowledge and Learning Team of the Operations Services Department of the Latin America and the Caribbean Region of the World Bank - http://www.worldbank.org/lac · June 2008 · Number 125