Note No. 51 March 2001 Empowering the Poor through Decentralization: Brazil Rural Poverty Alleviation Program Social Development Best Practice Elements · Multi-dimensional approach to poverty reduction aimed at enhancing opportunities, capabilities, empowerment, and security of the poor · Institutionalized mechanisms for participation and decentralized implementation · Ongoing monitoring and evaluation of social development outcomes by the government and community Alleviating poverty is one of the more difficult The Bank supported a pilot program, which ended challenges facing international lending institutions. in 1993. Between 1993 and 1996, the Bank scaled To make a sustainable impact, the World Bank has up. The project now consists of 30,000 community adopted Community-Driven Development (CDD). associations with 1,400 of the 1,600 communities We see a good example of CDD in the Brazil Rural in NE Brazil participating. Poverty Alleviation Program (RPAP), which has increased social inclusion while improving overall By empowering the poor and enabling local social conditions and institutional arrangements. involvement in decisionmaking, community-based projects have had resounding successes at reducing Over the past 25 years, poverty alleviation efforts unemployment, improving quality of life have been underway in the Northeast region of standards, and building a sense of ownership at Brazil, which has the single largest area of rural every level. To date, the project has financed poverty in Latin America. The region includes 12 42,750 community associations. million people who live in extreme poverty. The region has geographic and climatic barriers that The program has its basis in community intensify the incidence of poverty, including a poor associations that formed themselves after receiving natural resource base; chronic drought; and limited information about the project's opportunities. access to land, water, and financial resources. These associations identify and prioritize their own communities' needs. Such needs may be modest or One of the key strategies for reducing poverty in far-reaching and are limited only by what is this region has been the decentralization of possible under the Bank-supported operation. program components from the government to the individual states, municipalities, and communities. Through a problem-solving process, the associations prioritize their investments and submit ________________________________________________________________________________ This project was recognized as Best Practice in Social Development by the Social Development Family in June 2000, and received an award for Excellence in Supervision (QSR) from the Quality Assurance Group (QAG). Task team leaders were Luiz Coirolo and Joas Barbosa-De Lucena. This best practice note was prepared by Kathleen Kuehnast. The views expressed in this note are those of the author(s) and do not necessarily reflect the official policies of the World Bank. How RPAP Enhances Social Inclusion region covers 9 states and part of a tenth, and through Community-Driven Development accounts for 30 percent of Brazil's 148 million people. The federal government has declared the · Promotes empowerment of the poor Northeast a priority area for public development · Targets poorest communities programs. · Decentralizes administration to the states municipalities, and communities The underlying causes of rural poverty include the · Reduces layers of bureaucracy relatively poor resource base, as well as climatic · Ensures transparent transfer of funding factors that make the region vulnerable to · Promotes accountable governance · droughts. Other social constraints also affect the Encourages political support for community- oriented projects poor, including skewed access to land and the absence of a functioning rural financial system. Agriculture in the Northeast is poorly developed proposals to the Municipal Councils. The councils and uses very little technology. Consequently, represent a constituency 80 percent of whose productivity is low, with output per farm worker members are from poor rural communities and less than half that of other regions. organizations. When an association's proposal is approved, the State Technical Unit responsible for In the State of Rio Grande do Norte (population the project deposits the project funding directly 2.4 million), 31 percent of the population consist of into the community association's bank account. the rural poor. These rural poor are predominantly The community association implements, operates, smallholders, tenants, sharecroppers, and landless and maintains the subprojects. This leads to a laborers. They rely on a diverse strategy based on greater sense of local ownership, a commitment to traditional subsistence agriculture and livestock, success, and a vehicle for sustainability. complemented by cash crops, intermittent work on and off farm, and remittances from family The efficient flow of funds has been a critical members who have emigrated. Ninety percent of element of the RPAP's success, since funds do not rural households lack adequate water supply; 57 move through multiple layers of bureaucracy. percent lack proper sanitation facilities; 54 percent Direct disbursement to local communities not only of the adult rural population are illiterate; and 73 enables the efficient delivery of funds but also percent of rural heads of households earn one provides a more transparent process, one less minimum salary or less per month. vulnerable to corruption. Furthermore, this method delivers rural infrastructure to the poor at 40 At the beginning of the program in 1993, none of percent lower cost than investments of a similar the poor in Rio Grande do Norte or any other State quality delivered by public agencies. in the region could obtain credit from formal institutions. Today, 25 percent of the poor in NE Supervision of this project has used a highly Brazil qualify for credit. effective Management Information System, which can track implementation progress and identify Effective Transformation of Rural Development possible bottlenecks. Since considerable attention has been given to developing an effective Projects in Brazil relationship between Bank HQ and the local office Although the Bank has been involved in rural in Recife, good monitoring can be achieved, and development in this region since 1975, it was not problems can be dealt with quickly. until 1993 that the program was transformed into a community-based operation and began targeting Face of Poverty in Northeast Brazil the poorest communities. By 1996, the Rural Poverty Alleviation Program emerged as a Poverty is not a recent phenomenon in Brazil. decentralized, community-based development Rural and regional factors are major contributors to project for the states, municipalities, and the incidence of poverty. Approximately 50 communities. In addition to building local percent of the poor live in the rural areas, where capacity, it has reduced the role of government the incidence of poverty is twice that of urban agencies and eliminated unnecessary costs. By centers. Brazil's Northeast Region has long targeting the poorest communities, the program constituted the single largest area of rural poverty began to have significant impact on poverty not only in Brazil but in all of Latin America. The 2 alleviation so that 38 percent of rural Northeast Project Results families benefited from at least one implemented subproject. After the reform, 93 percent of the The results of the project include: resources reach communities; the remaining 7 percent are used for technical assistance and · 30,000 Community Subprojects financed in 1,267 administration. municipalities (76 percent of the region). Seventy- seven of the subprojects are infrastructure; 20 For the poor, the results have been striking. In the percent are productive; and the remaining 3 State of Sergipe, for example, 22,000 homes, 1,200 percent are social. small businesses, approximately 200 public and community buildings, 100 health posts, and 400 · 5,100 communities have water supply systems rural schools/daycare centers were electrified by operated and maintained by the communities. rural investments financed by the project. Likewise, provision of water to 49,000 households · 600,000 families have access to water of in the State of Bahia is estimated to have resulted generally good quality, thus reducing incidence of in direct benefits of about US$9.0 million. These water-borne disease and infant mortality. Access to benefits came through lowered opportunity costs to water also means increased time to generate obtain water, reduced medical costs and improved income. health conditions, and reduced use of expensive water trucks during droughts. In addition, the three · Fiscal savings include infrastructure subprojects types of water-related subprojects--1,006 dams, that are 40 percent cheaper when implemented and 33 simplified water supply systems, and 329 executed by the communities. tubular wells--have produced total benefits valued at US$43.6 million. Integrating Social and Economic Development The project has led to substantial improvements in The Rural Poverty Alleviation Program in the quality of life of rural communities as well as Northeast Brazil uses an integrated approach to growth in economic opportunities for the poor. social and economic analysis in tackling poverty at With improvements in rural electrification, water the community level. Key to the success of this supply, and other small-scale production and program is the use of economic and social infrastructure developments, the State of Rio indicators to monitor changes in the community. Grande do Norte has been able to expand its The reform process encourages the empowerment investments in cashew and melon production and of the poor and the development of social capital. to export these crops to the U. S. and Europe. Those who formerly were socially excluded are now directly involved in institutional development Besides improved quality of life and access to jobs, at the local level. Such community-oriented the program has given the poor greater voice. Of projects encourage new alliances and enable the the 1,400 municipalities participating, 1,000 have development of more innovative ways to improve created Municipal Councils in order to participate the lives of the rural poor. in the program. Since the subprojects are proposed, implemented, and maintained by the communities, Components of Success the poor are able to voice concerns and recommend ways to improve their communities, and ultimately The components of success in this project are: their individual lives. · Community-based empowerment creates the The project has visibly impacted community mechanism for community associations to empowerment. Community participation connotes initiate, facilitate, and supervise subprojects. enhanced public accountability and an awareness that these groups are a political force that must be · Poverty-targeting mechanisms ensure that reckoned with. The growing awareness that these project resources reach the poorest communities hold power has led the Northeast communities, as well as foster involvement of State Governors to lend unequivocal support to the the poor in decisions that affect their daily program and to ensure its continuation. lives. 3 · Decentralization of fiscal and investment successful and sustainable subproject decisionmaking from Federal to state and local investments. governments ensures more efficient project administration. Decentralization of resource · Transparency of funding process ensures that allocation and investment decisions to the limited resources are not squandered in municipalities and communities allows for a needless administrative layers. more transparent and efficient disbursement mechanism. · An integrated monitoring and evaluation system includes three levels of analysis: · Stakeholder participation enables states, household, community, and municipality and counties, municipalities, and local evaluates them both for social and economic communities to voice concerns and to become indicators. involved in decisionmaking, thereby enhancing client ownership. · Supervision quality is enhanced through a highly effective Management Information · Technical assistance and training for System, which tracks progress and identifies beneficiaries are indispensable inputs to possible bottlenecks. 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