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Linking communities to markets

Melissa Williams's picture

Welcome to the blog!  Over the next several weeks I’ll be raising issues related to linking communities to markets and what some of us are doing to help them.  You know, about 10 years ago, I sent out an email to a mailing list of about 200 staff asking what they were doing to link rural communities to markets.  I got one response, which asked “Do you mean roads?”  We’ve come a long way in our thinking and in our practice since then.
The form of support for linking communities to markets that I will discuss in this blog has been evolving from what the World Bank calls community driven development (CDD).  The CDD approach organizes and empowers institutions of the poor and builds positive social capital within communities so they can identify and manage investments that are their development priorities. Much of the Bank’s experience with CDD has focused on public goods---roads, schools, health centers, drinking water, etc.---and this came as no surprise.  Rural communities, especially, are woefully underserved with these basic needs. 
But the rural poor are farmers, entrepreneurs, and laborers who are just as concerned about their income and the economy as any other group. Over time, the investment requests began to shift from public goods to private goods, toll goods, and common pool resources.  I had just started working with Parmesh Shah at the time, and we characterized this trend as transforming social capital into economic capital. The chart below illustrates how we have characterized that progression.  Essentially, by starting at the grassroots and building a strong institutional foundation, development programs can create conditions on the ground for local economic development.  By then helping institutions evolve from a public goods to a market focus, and by forging links with government, markets, and financial institutions, development programs can help create rural communities with cash assets, investment options, and diversified local economy.

There are over 400 examples of projects using the CDD approach to reach rural communities throughout the Bank.  A smaller, but growting number of projects are starting with a focus on local economic development through community empowerment---good examples can be found in India, Sri Lanka, and Brazil. In the next blog post, I'll focus on these new types of projects---which we call Livelihoods Projects in South Asia.