SUSTAINABLE BY DESIGN? ECONOMIC DEVELOPMENT AND NATURAL RESOURCE USE
BY
J.C. Wandemberg Boschetti
Doctor of Philosophy in Socio-Ecological Systems New Mexico State University
This research is focused on the identification and enhanced understanding of systemic issues in general (e.g., economic, organizational, environmental) and human behavior in particular (e.g., participation, commitment, responsibility) leading to resource misallocation, over-exploitation, and unsustainable project outcomes.
The approach used transcends conventional neoclassical welfare economics. Human behaviors, such as participation and commitment, and factors that influence and motivate those behaviors (e.g., economic, organizational, environmental) are central to any understanding of how to design for sustainable outcomes and for the mitigation/elimination of negative externalities.
Research has shown that all organizations (formal or informal) make a conscious or unconscious choice between two organizational structures, (1) bureaucratic and, (2) participative-democratic. The effects of this choice on individual behaviors (goal-seeking vs. ideal-seeking), and the environmental management implications thereof, are profoundly different.
A review of literature on projects conducted throughout the world correlates project effectiveness (i.e., success in meeting project objectives and maintaining the desired outcomes) and negative outcomes (i.e., failure to meet project objectives and maintain the desired outcomes, misallocation of resources and negative externalities) with specific types of project organizational structures. In this research, I analyzed nine development projects undertaken in Ecuador.
The organizational structure and performance of the Ecuadorian projects were rated by the respondents by means of a survey instrument divided into 3 sections. The means of the scores obtained in sections II and III were used to construct a Project Performance Index (PPI) and an Organizational Structure Index (OSI), respectively, for each project. The PPI and OSI scores, for the nine Ecuadorian projects, were then used to conduct a simple linear regression. The results from this analysis indicate a strong linear positive correlation (R2 = .73; F = 19.33; Significant F= .0032) between project performance and organizational structure.
The hypothesis that an organizational structure that more closely resembles a participative democracy encourages high project performance and outcome sustainability is strongly supported.
The hypothesis that organizations that more closely resemble bureaucratic structures (regardless of their phenotypic design) translate into less than optimal performance and unsustainable outcomes is also strongly supported. Keywords: Design Principles, Economic Development, Externalities, Goal-seeking, Ideal-seeking, Participation, Sustainable System, Sustainability.
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TABLE OF CONTENTS
LIST OF TABLES.............................................................................................. xii
LIST OF FIGURES........................................................................................... xiii
LIST OF ABBREVIATIONS............................................................................ xiv
1. INTRODUCTION
1.1 A World with Increasing Relevant Uncertainties and System Discontinuities
1.2 Environmental Sustainability
1.3 Neoclassical Welfare Economics
1.4 Market Failure or Institutional/Organizational Failure?
1.5 Ecuador's Environmental, Social, and Economic Degradation
1.5.1 Economic Policies
1.5.2 The SUBIR Project
1.5.3 Institutional/Organizational Issues
1.6 The Importance of Organizational Structure
1.6.1 Sustainable Development: A Utopian Scenario?
1.6.2 From Goal-seeking Organizations to Ideal-Seeking Systems
1.7 Research Hypotheses
2. LITERATURE REVIEW
2.1 The Rhetoric of Sustainable Development
2.2 Environmental Economics and Negative Externalities
2.2.1 Global View of Negative Externalities
2.2.2 Local View of Negative Externalities
2.3 Possible Ways of Addressing the Negative Externalities Problem
2.4 The Record of Major Development Institutions
2.4.1The World Bank
2.4.2 The USAID Record
2.5 Project Failures: Unsustainable by Design?
2.6 Project Success: Sustainable by Design?
2.7 Lessons from Projects Reviewed
3. WHAT IS THERE TO LEARN ABOUT ORGANIZATIONAL DESIGN?
3.1 The Anachronic Bureaucratic Mindset
3.2 Defining Bureaucracy
3.3 Organizations in a Turbulent and Increasingly Complex Environment
3.4 Project Participation (Goal-seeking vs. Ideal-seeking) and Performance
3.4.1 Defining the Term "Participation"
3.4.2 Barriers to Participation
3.5 ORGANIZATIONAL DESIGNS
3.5.1 The Bureaucratic or Variety-Decreasing First Design Principle (DP1)
3.5.2 The Participative Democratic or Variety-Increasing Second Design Principle (DP2)
4. MATERIALS AND METHOD
4.1 Research Objectives
4.1.1 Methodology for Objective A
4.1.2 Methodology for Objective B
4.1.3 Methodology for Objective C
4.1.4 Methodology for Objective D
5. PROJECTS ANALYZED
6. RESULTS
7. DISCUSSION OF RESULTS
8. CONCLUSIONS AND RECOMMENDATIONS
REFERENCES
APPENDIX A: Survey Instrument
APPENDIX B: Project Statistics
APPENDIX C: Survey Statistics
LIST OF TABLES
Table 3-1 Behavioral characteristics of bureaucratic and participative democratic organizational structures
Table 6-1 Project Performance Scores for Each Project
Table 6-2 Organizational Structure Scores for Each Project
Table 6-3 Project Performance Index (PPI) and Organizational Structure Index (OSI)
LIST OF FIGURES
Fig.3-1 The DP1 Organizational Structure
Fig. 3-2 The DP2 Organizational Structure
Fig. 6-1 Graphical Representation of Project Performance Scores
Fig. 6-2 Graphical Representation of Organizational Structure Scores
Fig. 6-3 Graphical Representation of PPI and OSI Scores
Fig. 6-4 Scatter Plot Showing Best-fit Line and Regression Equation
Fig. 7-1 Schematic Presentation of the Two Genotypic Organizational Structures
Fig. 8-1 Graphic Representation of the Correlation Between Project Performance and Organizational Structure
LIST OF ABBREVIATIONS
CRS Community Reference System
FAO Food and Agriculture Organization
FN Fundación Natura
IFAD International Fund for Agriculture and Development
IMF International Monetary Fund
MAI Multi-lateral Agreement on Investment
MNP Machalilla National Park
NGO Non-governmental Organization
PDM Participatory Decision Making
PDW Participative Design Workshop
SC Search Conference
SO4 Strategic Objective #4
SUBIR Sustainable Uses for Biological Resources
TNC The Nature Conservancy
UNDC United Nations Development Commission
UNEP United Nations Environment Commission
USAID United State Agency for International Development
WCED World Commission on Environment and Development
WRI World Resources Institute
WTO World Trade Organization
1. INTRODUCTION
1.1 A World with Increasing Relevant Uncertainties and System Discontinuities
The world in which we now live is often referred to as dynamic and turbulent. This turbulent environment, characterized by increasing relevant uncertainties and system discontinuities, was first noticed as emergent in 1962 by Emery and Trist and described as Type IV in their seminal work "The Causal Texture of Our Environments" (1965). Within this type of environment, deterministic linear thinking and mechanistic problem-solving approaches are proving insufficient to deal with the increasing complexities of our times, particularly regarding social, economic and environmental issues (Funtowics and Ravetz, 1991). So, how do we deal with these issues within an increasingly dynamic, uncertain, interconnected, and complex environment? Although the limitations of this research are obvious, such as the relatively small sample of projects analyzed, the value of the alternative offered here cannot be diminished.
1.2 Environmental Sustainability
The importance of environmental sustainability (however defined), as the foundation for social, institutional, and economic well-being, is becoming globally recognized. The need for rethinking development approaches in a way that best guarantees environmental, social, institutional, and economic sustainability has been acknowledged and documented by researchers, social scientists, and development agencies throughout the world (Anderson, 1991; Beckerman, 1992; Brown et al., 1993; Daly, 1993; Homer-Dixon et al., 1993; Toman, 1994; Upreti, 1994; Utton et al., 1976; Young, 1992). Recognition is the easy part. What remains to be determined is the means by which social, economic, and environmental sustainability can be best achieved. Environmental degradation, such as deforestation, desertification, wetlands destruction, air and water pollution, keep reaching unprecedented proportions. This is particularly evident in some parts of the "less developed" world (Bos, 1994; Brown, 1993; Douthwaite, 1993; Duchin and Lange, 1994; Hudson, 1991). The increasing pressure of global free trade and the inefficient use and allocation of natural resources in these parts of the world impose ever-greater constraints on the livelihoods and well-being of local peoples. Negligible man-made capital assets combined with non-existent or ill-defined property rights, inaccessible financial services, inadequate or non-existent safety nets in time of disaster or stress, and inability (or unwillingness due to inability) to participate in decision-making, forces people to adopt ever shorter time horizons. These forced decisions favor immediate needs and goals over long-term objectives or ideals and most often contribute to a downward spiral of economic, social, institutional, and environmental degradation (IFAD, 1995). A focus on what may constitute the best means to deal with uncompensated effects (i.e, negative externalities ) and unsustainable project outcomes associated with development programs must become a priority in local and global development strategies. This focus was somewhat acknowledged in 1987 by the World Commission on Environment and Development (WCED, 1987), or Bruntland Report, and again in June 1992 at the Rio Summit by the United Nations Development Commission (UNDC, 1992) when it was stated that "Democracy at all levels of government, the involvement of community groups and non-governmental organizations, and equal rights for all are key to sustainable development." However, it does not seem feasible to translate this statement into actions, and much less to accomplish a "sustainable development," without a conceptual knowledge of human organizations and their underlying behaviors.
1.3 Neoclassical Welfare Economics
Neoclassical welfare economics has been highly criticized for centering on the concept of general economic equilibrium (Cordato, 1992; Ormerod, 1994; Prychitko, 1993; Soros, 1997). This concept has been developed in such a way as to have little, if any, relevance in the real world of policy making (Cordato, 1992; Soros, 1997). The model of general equilibrium is an abstract answer to an abstract question, i.e., whether or not a decentralized economy, relying only on price signals for utility and profit maximization, can achieve general equilibrium (Prychitko, 1993). The premise of a market clearing equilibrium according to Ormerod (1994) should be considered an unacceptable principle for economic theory. Mathematical analyses have shown that uncertain, incomplete, and/or late information can give rise to non-linear behavior in markets considered otherwise ideal (Ibid). Ormerod also argues against the "rationality" of economic units (i.e., self-interest in micro-economics and rational expectations in macro-economics) for this rationality, in actuality, is neither definable nor evident and thus not very meaningful as a general postulate for economic theory (Ormerod, 1994). Economists have abstracted almost completely from real-world efficiency problems facing humans by constructing static, deterministic, and utopian models of efficiency (Cordato, 1992; Soros, 1997). Rather than making economic models reflect reality, economists have tried to force reality to reflect their models. The determinate mathematical solution of competitive equilibrium, that mathematical economics has shown to exist in the abstract world is, according to Ormerod (1994), mathematically unsound and conflicting with observed events. Even if this mathematical solution were flawless, one cannot translate this static equilibrium to an existing economy based upon theoretical and unrealistic assumptions. Some of these utopian assumptions follow:
Perfect information that would allow for perfectly rational utility-maximizing and profit maximizing choices.
Perfect competition, whereby rivalry over profits is exhausted.
Full equilibrium that captures marginal costs and benefits.
Nonexistent monopolistic forces which can individually manipulate prices.
Atomistic individualism which implies economic agents free from traditions, customs, and non-pecuniary interests.
If these assumptions (and others, such as appropriate convexity conditions to allow for comparable marginal rates of substitution) are met, then it is said that the economy in question has reached general equilibrium and is efficient, or Pareto optimal, i.e., further changes in production and exchange conditions will not further increase the total welfare of society (Atkins and Lowe, 1977). But general equilibrium, if at all possible in a timeless, static and abstract world, is not possible to produce in the real world. The impossibility of achieving perfect knowledge is one example. Ormerod (1994) refers to substantial evidence (Partha Dasgupta and Geoffrey Heal's book entitled Economic Theory and Exhaustible Resources) supporting the impossibility of fully informative price systems. Perfect knowledge may be possible only in a closed, timeless, static and non-existent system, but it is impossible within non-equilibrium, open, and real systems (Pepper, 1942). For example, many of the results obtained from the standard model of competitive equilibrium do not hold when uncertainty is introduced into the theoretical framework (Ormerod, 1994). Ormerod also refers to David Newbery and Joseph Stiglitz's proof that the standard model of competitive equilibrium is not true (Ibid). This is not to say that "free-market" policies are useless, but that the real world is far more complex than allowed for in the conventional economic model of rational expectations and competitive equilibrium. In lieu of perfect knowledge, which is non-attainable, a high degree of communication between the actors within a system ought to be sought. This would allow for the existing knowledge to be maximally and optimally available to all.
1.4 Market Failure or Institutional/organizational Failure?
The inefficient use and allocation of natural resources (e.g., negative externalities) which decrease social welfare, threaten long-term sustainability and the short-term viability of development efforts, manifest themselves, inter alia, in such issues as deforestation, soil erosion, air and water pollution at the local level, and in ozone depletion, global warming, and desertification at the global level. Inefficient resource use and allocation of resources is most often referred to in terms of "market failure."
Economists argue that environmental degradation results from the failure of the market system to put value on the environment. This market failure appears as negative externalities reflected by natural resources overuse and eventual degradation (Cropper and Oates, 1992; Daly and Cobb, 1989). The solution offered is to put a price on environmental goods and services. This approach assumes that environmental, social, and economic failures can be solved through the superimposition of an abstract economic construct called a market. The "market," however, is an abstract device for rationalizing an aggregate of human behaviors in one sphere of human interactions. Markets are, most often, the predictable results of institutional/organizational factors which, directly and indirectly, impose and reinforce patterns of individualistic thinking and behavior. People create markets, or keep them from being created or functioning efficiently. People are at the core of environmental degradation/conservation. To accept as given, and to focus on the market and its failures, may only reinforce the very values that are at the root of most social, institutional, environmental, and economic problems, limiting, a priori, the search for answers (Beder, 1996).
It has been argued that markets, far from being free or operating efficiently (through the "invisible hand") to allocate resources in the interests of society, are dominated by few market forces (e.g., large firms and corporations), also referred to as the "invisible elbow" (Jacobs, 1991). This "invisible elbow" aims at maximizing private profit while not necessarily trying to reduce, much less eliminate, negative externalities (Templet, 1995; White, 1992). Some even argue that environmental economics, with its focus on "efficiency," is a deliberate ploy by those in power to counteract any possibility of social and political change arising from environmental concerns (Beder, 1996).
Market failures, responsible for the generation of factor market distortions, such as subsidies, taxes, and quotas, cause the divergence between private and social marginal costs. This divergence creates an incentive for profit-maximizing firms to transform private costs into external costs (i.e., negative externalities), shifting the market supply curve to an artificially low point based only on private costs. When social costs are ignored, a production subsidy of sorts is created which leads to artificially low product prices and excessive production and pollution. Inefficient allocation, production, and consumption of resources lead to social, economic, institutional, and environmental degradation (Daly, 1968; Perrings, 1987; Templet, 1994). The failures to eliminate or reduce the divergence between private and social costs and uncompensated effects (i.e., negative externalities) associated with development programs do not seem inherent to specific regions or communities. Nor do they appear to be due to financial constraints, poor science/technology, or environmental circumstances.
These divergences do seem to be consistently associated with organizational or institutional structures based on a "centralized mindset" (Resnick, 1997) and "mechanistic" or "organistic" world views (i.e., close-system perspectives) (Pepper, 1943). These close-system perspectives and a centralized mindset seem characteristic of most development projects (Hudson, 1991; Nowak et al., 1995; Wood, 1976). Consequently, negative externalities are not be the product of some technical failure of an abstract economic construct called a market, but a consequence of inadequate human behaviors and interactions. Hence, the need for the establishment of an organizational/institutional environment conducive to adequate human behaviors and interactions.
1.5 Ecuador's Environmental, Social, and Economic Degradation
At the heart of Ecuador's social, economic, and environmental degradation lie "market failures" evidenced by two digit inflation, crime, unemployment, air and water pollution, deforestation, erosion, and sedimentation of hydroelectric dams. These "market failures" are the legacy of economic development models that lacked the capacity to internalize, reduce, or eliminate negative externalities.
In Ecuador, as in most countries, economic and political aspects have historically taken precedence over social and environmental concerns. This is evidenced by the progressive reduction of the health and education budgets relative to other allocations (e.g., foreign debt servicing, defense) and the paucity of resources allocated to combat environmental degradation (Southgate and Whitaker, 1994). Despite Ecuador's nation-wide deforestation (estimates range from 60 thousand hectares/year to more than 340 thousand hectares/year), air and water pollution (e.g. Taura syndrome ), mangrove destruction, desertification, no solution seems to be forthcoming (Ibid). Ecuadorian governments have been unable to protect even the Galapagos Islands, patrimony of humanity, from vested interests more concerned with commerce and short-term gains (e.g., tourism, fishing) than with the long term sustainability of the islands. Although it can be argued that governments try to protect the integrity and well-being of their citizenry, since the globalization of "free" markets, governments have been under pressure by forces such as the Multilateral Agreement on Investment (MAI), and the World Trade Organization (WTO) to focus mainly on global economic variables while paying less attention to social, human and environmental factors at the local level. The focus on economic variables (e.g., monetary and fiscal policies, especially at the macro level) has proved to be relatively successful in short-term gains (e.g., short-term inflation reduction). However, short-term economic gains have not been maintained and have done little to address Ecuador's environmental degradation, let alone its social ills. The importance of addressing Ecuador's long-term internal and external economic factors within a global context cannot be over emphasized. Issues such as discriminatory macro and micro sectoral policies, factor market distortions, financial sector repression, inadequate investment in the scientific base of the rural economy, foreign debt servicing, and market globalization are important to the nation's survival (Southgate and Whitaker, 1994). How these internal and external factors are addressed needs to be reconsidered if "survival" is to have any meaning.
1.5.1 Economic Policies
Past and current economic policies have stimulated, and continue to stimulate, profit maximizing firms to transform private costs into social costs (i.e., negative externalities). This private-cost shifting results in a type of production subsidy that leads to artificially low prices (e.g., timber prices) which stimulate over-consumption and more negative externalities, i.e., more deforestation, erosion, sedimentation and desertification. Such subsidies have a domino effect, producing low extraction fees, quotas and bans for export, and other factor market distortions. This would explain the strong correlation between the rate of logging worldwide and forest ownership patterns (Marchak, 1995). The smaller the number of wood lot owners, the greater the logging rate (Ibid).
One of the many environmental problems facing Ecuador is deforestation. However, according to some (e.g., Ecuadorian Wood Industry Association), deforestation is not the main problem facing the forestry sector in Ecuador, but the following:
· Absence of a forestry zoning plan
· Obsolescence of the existing forestry law
· Lack of up-to-date forestry inventories and accounting
· Lack of credits or incentives for sustainable forestry
· Inaccessibility of forest lands for permanent use
· Undefined areas for permanent forestry use
· Lack of a maintained reforestation plan at the national level · Absence of a forestry culture in the country · Use of inefficient technologies
· Lack of technological R&D
It is important to notice that seven out of these ten points deal directly with organizational or institutional problems.
1.5.2 The SUBIR Project
To help stop and reverse environmental degradation in Ecuador, the United States Agency for International Development (USAID) undertook several strategic objectives (SO). One of these, namely, Strategic Objective #4 (SO4) aims at promoting the sustainable use of the natural resource base, the conservation of biological diversity, and the control of pollution (USAID, 1996). The primary vehicle used by USAID for supporting SO4 is the Sustainable Uses for Biological Resources or SUBIR project (Ibid). The SUBIR project was developed "to identify, test and develop economically, ecologically, and socially sustainable resource management policies and models in three Ecuadorian parks and their buffer zones in order to preserve biodiversity and improve the economic well-being of local communities through their participation in the management of renewable natural resources" (USAID, 1996:6). The primary constraint facing SO4, according to USAID (1996), is the magnitude of the problem of environmental degradation and the complexity of interests which involve indigenous groups, petroleum and timber companies, environmental NGOs and others. An additional constraint identified by USAID is the Government of Ecuador's weak ability to follow through on policy reforms and laws already approved (Ibid).
1.5.3 Institutional/Organizational Issues
Much of USAID's analysis of constraints confronting SO4 (as of May, 1996) can be characterized as institutional or organizational--as opposed to technical--issues. USAID (1996) has acknowledged that, unless people change their behavior with respect to natural and man-made resource use, there is little hope for sustainable development. Everyone involved in development activities has, on more than one occasion, heard or said, "we could take care of the problem immediately if the people would only cooperate/participate." The people in general (community members, volunteer groups, project teams), and their behavior in particular, and how they relate to each other (i.e., organization) are crucial to the success or failure of a collective endeavor. This is particularly true given the dynamic and turbulent environment in which most humans are living. Yet, this virtually axiomatic statement has not translated into efforts to investigate the issue commensurate with its importance. The reasons for not doing so may relate to relative familiarity and ease of search for technical solutions, and to lack of conceptual clarity of alternative approaches such as examining the role of the extant organizational structures.
1.6 The Importance of Organizational Structure
Lippitt and White's (1943) seminal work on group climates demonstrated that all human organizations embody one of only two genotypic and fundamentally technical organizational structures: (1) Bureaucratic; and, (2) Participative Democratic. Emery (1993) refers to bureaucratic and participative democratic structures as the first and second design principles, respectively (Ibid). The bureaucratic, or First Design Principle (DP1), has a dominant hierarchy inhabited by specialized individuals with highly defined tasks. In this type of structure the redundancy, essential to the flexibility, adaptability, and viability of all systems is incorporated through the addition of redundant "parts" (i.e., individuals with the same skills) (Emery, 1993). This accounts for the technical name "redundancy of parts" (Emery, 1993). It has also been called "the Megamachine" (Mumford, 1967). The participative democratic, or Second Design Principle (DP2), has a non-dominant hierarchy or flat organizational structure inhabited by individuals who are highly specialized, but multi-skilled. In this type of structure, the redundancy, essential to the flexibility, adaptability, and viability of all systems, is incorporated through the process of multiskilling (i.e., individuals with different [but redundant] functions). This accounts for the technical name "redundancy of functions" (Emery, 1993).
Organizational researchers have found that bureaucratic (DP1) and participative democratic (DP2) structures have profound and predictable effects on the people who live and work within them regardless of the personalities involved (Alderfer, 1987; Argyris, 1958; Emery, 1993; Lippitt and White, 1943; Lowin, 1958).
The role of organizational structure in dealing with environmental problems seems crucial because an appropriate organizational structure may provide the foundation for the creation, establishment, and institutionalization of the necessary conditions and mechanisms for the attainment of project objectives and the maintenance of their outcomes, while eliminating/reducing negative externalities. At the macro level, these mechanisms would rely on market-based environmental policies that assign legal and financial responsibilities to industries and individuals, better quantified cost/benefit analysis of project developments, and adequate monetizing of environmental goods and/or damages through environmental accounting, environmental adders, tradeable permits, eco-taxes and the like.
1.6 The Importance of Organizational Structure
Lippitt and White's (1943) seminal work on group climates demonstrated that all human organizations embody one of only two genotypic and fundamentally technical organizational structures: (1) Bureaucratic; and, (2) Participative Democratic. Emery (1993) refers to bureaucratic and participative democratic structures as the first and second design principles, respectively (Ibid). The bureaucratic, or First Design Principle (DP1), has a dominant hierarchy inhabited by specialized individuals with highly defined tasks. In this type of structure the redundancy, essential to the flexibility, adaptability, and viability of all systems is incorporated through the addition of redundant "parts" (i.e., individuals with the same skills) (Emery, 1993). This accounts for the technical name "redundancy of parts" (Emery, 1993). It has also been called "the Megamachine" (Mumford, 1967). The participative democratic, or Second Design Principle (DP2), has a non-dominant hierarchy or flat organizational structure inhabited by individuals who are highly specialized, but multi-skilled. In this type of structure, the redundancy, essential to the flexibility, adaptability, and viability of all systems, is incorporated through the process of multiskilling (i.e., individuals with different [but redundant] functions). This accounts for the technical name "redundancy of functions" (Emery, 1993).
Organizational researchers have found that bureaucratic (DP1) and participative democratic (DP2) structures have profound and predictable effects on the people who live and work within them regardless of the personalities involved (Alderfer, 1987; Argyris, 1958; Emery, 1993; Lippitt and White, 1943; Lowin, 1958).
The role of organizational structure in dealing with environmental problems seems crucial because an appropriate organizational structure may provide the foundation for the creation, establishment, and institutionalization of the necessary conditions and mechanisms for the attainment of project objectives and the maintenance of their outcomes, while eliminating/reducing negative externalities. At the macro level, these mechanisms would rely on market-based environmental policies that assign legal and financial responsibilities to industries and individuals, better quantified cost/benefit analysis of project developments, and adequate monetizing of environmental goods and/or damages through environmental accounting, environmental adders, tradeable permits, eco-taxes and the like (Atkins and Lowe, 1977; Connor et al., 1995; Costanza, 1990; Cropper and Oates, 1992; Howarth, 1996; Jordan, 1995; Maskin, 1994; Myles, 1995; Papandreou, 1994; Usher, 1992 ). At the micro level, the potential for the appropriate organizational structure to enhance project performance and eliminate (rather than just reduce or internalize) negative externalities needs to be examined.
1.6.1 Sustainable Development: a Utopian Scenario?
Definitions of sustainability abound. However, all definitions of "sustainability" seem to share at least two things in common: (1) they are all anthropocentric (unless the human component is removed from the picture); and, (2) they all speak of an ideal process or state. Based on the these two observations and on the seminal work of Ackoff and Emery (1972), the working definition of sustainability that is used throughout this research is the following:
a socio-ecological process characterized by ideal-seeking behavior on the part of its human component.
Ideal-seeking behavior, with regards to socio-ecological processes, means behavior characterized by the desire (i.e., system effectivity ) and ability (i.e., environmental affordances such as, opportunity and resources) to:
1. Progress toward an ideal by choosing a new goal when one has been achieved (or the effort to achieve it has failed), and
2. Sacrifice a goal for the sake of an ideal.
Only ideals serve as appropriate guidelines within a context of uncertainty and complexity because only ideals are time-free, hence, intrinsically adaptive in themselves (Emery, 1993).
The four universal ideals are:(1) Homonomy; (2) Nurturance; (3) Humanity; and, (4) Beauty (Ibid). However, in order for ideal-seeking behavior to be manifested, the system (e.g., a person) must provide the effectivity (i.e., the desire) to behave as such, and the environment must provide the right affordances (i.e., opportunity and resources).
1.6.2 From Goal-seeking Organizations to Ideal-Seeking Systems
Human behaviors (e.g., participation, commitment) and factors (e.g., values, institutions, policies) that influence and motivate those behaviors are central to any understanding of organizational performance. People's actions do not arise as simple responses to external or internal stimuli per se, but as a response to situations determined by the relationship between the effectivities of the system and the environmental affordances through positive and negative feedback loops (Emery, 1985). In other words, people's behaviors are determined by the relationship between the individual and his/her environment. Thus, negative behaviors (i.e., maladaptations, such as apathy, dissociation, lack of responsibility, commitment and participation) seem attributable to a specific organizational structure, or design principle, which restricts the effectivities of its elements within a turbulent environment. The restriction of element effectivities gives rise to goal-seeking or "rational" individualistic behaviors as a requirement for survival within this type of organizational structure and turbulent environment. On the other hand, positive behaviors, such as altruism, high responsibility, commitment and participation, seem attributable to a contrasting organizational structure, or design principle, which enhances the effectivities of its elements within this type of structure and turbulent environment. The enhancement of element effectivities gives rise to ideal-seeking behavior through the purposeful pursuit of ideals. Because ideal-seeking behavior and choice are intimately related (Ackoff & Emery, 1972), the future of human kind is increasingly determined by the choices people make and their behavior (Emery, 1985). Given the importance of organizational and/or institutional issues in terms of human behavior, and based on the working definition of sustainability used in this research, it seems only appropriate to focus on the importance of organizational design principles. 1.7 Research Hypotheses The hypotheses of this research state that: 21 projects with an organizational structure that more closely resembles a bureaucracy (DP1) reduce project performance, increase negative impacts, and do not allow for the sustainability of desired project outcomes. 22 projects with an organizational structure that more closely resembles a participative-democratic organizational structure (DP2) enhance project performance, reduce/eliminate negative impacts, and allow for the sustainability of desired outcomes. Hypothesis #2 is based on the assumption that, given the appropriate level of participation, fostered by a participative democratic organizational structure, people's actions and behaviors will be consistent (i.e., ideal-seeking) with the requirements for sustainable systems, that is, economic, social and environmental justice.
2. LITERATURE REVIEW
2.1 The Rhetoric of Sustainable Development
The fundamental rhetoric of "sustainable development" has always been economic. Economists are ubiquitous in development projects as a sort of chosen rational instrumentality of national progress (Bennett, 1988). This economic or "capitalistic" bias, depending on one's perspective, has several implications. The most severe and pervasive implication has been an economic theory which views humans as "rational" economic beings, i.e., homo economicus, or mere "profit-maximizing machines." From this view, it followed that, by promising maximum net economic gains people (e.g., participants or "beneficiaries") would accept any policy or be committed to the implementation and success of any project, thus, achieving a questionable atmosphere of certainty (Bennett, 1988). Does such a world exist? This view has been characterized as a radical and arguably dangerous abstraction from social reality (Daly and Cobb, 1989; Damasio, 1995;Ormerod, 1994; Soros, 1996).
2.2 Environmental Economics and Negative Externalities
Negative externalities is a central issue to environmental economics and sustainability. Unfortunately, economic models allow economists to ignore significant components of the real economy as "externalities" because these components are "external" to the exchange processes of the market. But externalities are not external to our biosphere and, thus, do not stay "external." The concept of externalities has been explicitly discussed since Alfred Marshall's (1890) Principles of Economics. Marshall introduced the notions of external economies and diseconomies. These notions evolved into pecuniary and technological externalities of production and consumption (Papandreou, 1994). Pecuniary externalities are not necessarily a sign of market failure and, thus, are not of much concern for policy. For instance, the diminished returns of existing firms caused by the entry into the market of a new firm, or the expansion of an industry, driving up the labor price to another firm are examples of the market reallocating resources to the highest value uses and, eventually, private marginal costs and benefits should, according to economic theory, equate. By contrast, technological externalities deal not only with the efficient use of resources but also with their efficient and equitable allocation. They represent third party effects on production possibilities or utility levels. The classic example is pollution (Papandreou, 1995).
2.2.1 Global View of Negative Externalities
At the international level, aid agencies, such as the United States Agency for International Development (USAID), the World Bank, the United Nations Environment Programme (UNEP), and the World Resources Institute (WRI) have demonstrated concern for uncompensated effects, or negative externalities, associated with development projects such as pollution and environmental degradation. These not only are seen as a great waste of resources but also as a major threat for global stability and sustainable development. So long as social costs are ignored, the gap between the haves and have-nots will continue to widen, at the expense of the environment(Cocks and Walker, 1994; UNEP, 1995; von Amsberg, 1993; Wichterman, 1995; WRI, 1993).
2.2.2 Local View of Negative Externalities
In developing countries, mechanisms to internalize, reduce, or eliminate negative externalities are either lacking, wrongfully implemented, or not implemented at all. This is particularly true in Ecuador, where the inefficient use and allocation of resources has led to decreased social welfare and to the deterioration of the social fabric (Southgate & Whitaker, 1994).
2.3 Possible Ways of Addressing the Negative Externalities Problem
To date, research on the issue has identified five basic ways to address the negative externalities problem:
1. Quality Control.
2. Taxes and Subsidies
3. Market Creation
4. Externality Internalization
5. Avoiding the Creation of Externalities.
1) Quality Control
This is the most common approach used throughout the world. It is a typical command-and-control approach forcing technology (e.g., ISO 9000, 14001, SA 8000). It is the most difficult to enforce and least efficient of all five options (McMorran and Nellor, 1994). This approach does not achieve the reduction of externalities at least cost and may even create barriers to entry and price increases (Papandreou, 1995).
2) Taxes and Subsidies
Environment or Pigouvian taxes have been used in a still unsuccessful attempt to bring social and private costs together. While "green" taxes can correct behavior and collect money (at least in theory), the externality problem has two sides and control by one side may not be efficient (e.g., airport and noise). In addition, determining the right amount of the tax is very difficult in the real world. An inappropriate tax could lead to inefficiently high costs (i.e., over abatement or under adjustment) (Papandreou, 1995). This is linked to the argument that imposing a Pigouvian tax on a monopolist could reduce rather than enhance social welfare (Cropper and Oates, 1992). Pigouvian taxes or subsidies are difficult to implement and introduce particularly for their implications for other policy objectives and thus encounter great opposition (McMorran and Nellor, 1994). Eco-taxes continue the perception that the environment is a liability on the balance sheet environment (Daly, 1996; Spires, 1996). However, given the little understanding of other alternatives, taxes will continue to be politically more feasible (Spires, 1996).
3) Market Creation
Market creation (i.e, quotas or tradable permits to existing firms) has been a preferred mechanism over Pigouvian taxes by most industrialized countries. Market creation is slowly growing but is far from becoming the norm. While this mechanism permits, in theory, the achievement of environmental goals at a minimum economic cost, it is difficult to determine the right amount of permits to be issued. It can also be viewed as sanctioning the negative externality (Cropper and Oates, 1992; Daly, 1996).
4) Externality Internalization
Externality internalization, i.e., the victim and the perpetrator negotiate to efficiency. The government role is limited to ensuring that no monopoly power is exerted or that no free-riding on the negotiation takes place. The main barrier to this approach are the institutionalized organizational structures in place. Within this type of institutionalized organizational environments (i.e., rigid dominant hierarchies), where lack of accountability, poorly defined and unenforceable property rights and regulations prevail, it is counter to the individual interest to cooperate, creating high transaction costs and evasive strategies by perpetrators (Vasquez, 1997).
5) Avoiding the Creation of Externalities
This fifth alternative has remained mostly theoretical. Avoiding the creation of a negative externality could only be achieved if, first of all, the potential "perpetrator" of the negative externality is aware of the potential externality and has a viable alternative that would avoid its creation. If there is no viable alternative in place, one must be created. This is what matching system effectivities and environmental affordances is about. Matching System Effectivities and Environmental Affordances The matching of systems' effectivities to environmental affordances could only take place in an organizational structure conducive to such matching by use of timely feedback and continuous conscious, conceptual and experiential learning (Katz and Kahn,1966). In a framework for ecological learning (i.e., open system) system and environment are interdependent. They are mutually affecting as explained by the model of directive correlations (Sommerhoff, 1974). Given the correlation between system and environment it is essential for any one system to match its effectivities to the affordances of its environment if the system is to be actively adaptive, i.e., purposeful (Emery, 1985). An environment containing two parties in potential conflict does not afford the parties the effectivity of cooperation in the absence of a mediating affordance. It does afford, however, the opportunity for a confrontation. Environmental affordances can only be specified with respect to a system's effectivities. System effectivities can only be specified with respect to environmental affordances (Ibid). The conceptualization of the relation between system and environment allows for a more precise analysis of organizational structures and is summarized by Emery F. (1985) as follows:
1. People's actions arise in response to the situation defined by the relations between their effectivities and the environmental affordances.
2. The interrelation of affordances and effectivities must be explicitly dealt with in any model of communication attempting to explain human actions.
3. Communication facilitates organized activities and the matching of effectivities to affordances.
4. Organizations are nothing more than controlled and coordinated effectivities of coactors.
The need to align organizational systems and processes (i.e., system effectivities) with natural processes and the environment (i.e., environmental affordances) is also recognized and outlined in Westley and Vredenburg's (1996) argument concerning what they call "Technospheres" and "Ecospheres."
A Modified Coasian Approach
The idea of designing for "fit" or sustainability is not new and is congruent with the Coasian argument (Korten, 1980). That argument states that in the absence of transaction costs and strategic behavior (e.g., monopolies), distortions associated with externalities will be resolved through voluntary bargaining among the parties involved, and that no further inducements (e.g., Pigouvian taxes) would be needed in order to achieve a Pareto efficient outcome (Cropper and Oates, 1992). Research based on a modified Coasian stance has demonstrated that cooperation, through contractual agreements, suffices to achieve efficiency as long as there is no monopoly power and the externalities involved are excludable, i.e., do not allow free-riding. Otherwise, government intervention will be needed to avoid free-riding on the agreements (Maskin, 1994).
Externality internalization and avoiding the creation of externalities to begin with through a modified Coasian approach (i.e., matching of system effectivities and environmental affordances) could be, under a participative and cooperative scenario, not only the most common sense approach, but also the most efficient of all in terms of Pareto optimality . However, a modified Coasian approach (i.e., a cooperative-bargaining process) could only be productively undertaken within an organizational design where timely feedback is possible, transaction costs are low, and where it is in the individual interest to cooperate (Emery, 1993, 1995; Stacey, 1995).
2.4 The Record of Major Development Institutions
Inefficient use and allocation of resources are associated with both developing and developed economies and institutions where the mechanisms to deal with negative externalities are minimal, if any, and where the appropriate organizational structure is non-existent (Costanza, 1990; Cropper and Oates, 1992; Maskin, 1994; Southgate and Whitaker, 1994; Templet, 1995).
2.4.1The World Bank
The World Bank has been under global scrutiny regarding its lending practices and the global implications of its funded projects. It has launched, during the past few years, a global campaign to convince people about the "greenness" of its lending practices. The overall impact of the World Bank, since its establishment in 1944 to promote self-sustaining economic development, has been characterized as, on balance, a failure (Osterfeld, 1994). Because the repayment of World Bank loans is guaranteed by recipient governments, there is no accountability to worry about when conducting a feasibility analysis of projects to be funded (Ibid). It is also argued that the organizational structure of the World Bank does not allow for an active-adaptive relationship of the peoples involved/affected by a project and their environment (Kerr and Sanghi, 1992). World Bank projects have yet to be based on concepts of open and evolving systems built on participative-democratic principles of experiential learning and contextualism (Allen, et al., 1996; Emery, 1981). The type of failure referred to in the United Nations report (UNEP, 1995) is starkly evident in Kottak's (1985) analysis of 82 World Bank-financed projects. Kottak analyzed the role played by socio-cultural variables and their contribution to the design of Bank-assisted rural development projects. He found that greater economic returns, in some cases twice as high, were associated with what he calls "enhanced sociocultural fit," meaning that the projects acknowledged established socioeconomic and cultural patterns, which allowed for the incorporation of these variables into project design (Kottak, 1985). In a comparison of rates of return for projects, Kottak found that socioculturally compatible projects had an average rate of return of 18.3 percent. Socioculturally incompatible projects had less than half that, at 8.6 percent (Ibid). Socioculturally compatible projects incorporated indigenous cultural practices and social structures in project implementation. This allowed for the elimination of uncompensated effects which could explain the difference in the rate of return. This difference in return on investment is a tax (i.e., a technological negative externality) borne by the people. The majority of the reports examined by Kottak pointed to problems that arose because during project preparation or design, socioeconomic information was either lacking, insufficiently analyzed, or simply ignored (lack of accountability or a pretense of knowledge?). Kottak's analysis stresses the importance of proper design as a key ingredient in project success. He considers putting first those who must live with the results as critical, for they, those who must live with the results, become the project's best monitoring and evaluation team (Kottak, 1985). While Kottak acknowledges that assessing cultural compatibility as an ex post exercise is a judgmental endeavor, he argues for the value, not of precise percentages, but of identifying mechanisms through which a better compatibility, or social fit, can be routinely incorporated into project development (Kottak, 1985).
2.4.2 The USAID Record
A review, by Wichterman (1995), of USAID-supported development programs, shows that few projects emphasized sustainability as a major goal. This review also showed that few projects demonstrated an understanding of sustainability, at both the theoretical and practical levels during the project design phase. Few USAID projects are monitored and evaluated to ascertain whether benefit flows are sustainable (Wichterman, 1995). Wichterman also indicates that a study [IRIS, 1994] found that, overall, less than 8 of 44 projects USAID considered to be "successful" had a high probability of achieving benefit sustainability (Wichterman, 1995). It has been argued that the little emphasis given to sustainability in AID projects is due to a lack of understanding of what sustainability is all about (Finsterbush and Van Wicklin, 1987; Hudson, 1991; Wichterman, 1995).
2.5 Project Failures: Unsustainable by Design?
The little attention given to sustainability in AID projects may be due to a lack of understanding of how to achieve sustainability rather than to a lack of understanding of its meaning or significance. As was noted earlier in reference to USAID SO4, people (the target population, project team, government entities) are often at the core of project failure. There is evidence to suggest that this is an issue that can be characterized as a design flaw (Bennet, 1988; Finsterbush and Van Wicklin, 1987; Hudson, 1991; Narayan, 1995). Programs developed at a distance, with little or no compatibility with, or reference to, the perceptions and capacities of local peoples have often failed (UNEP, 1995). Since the late seventies, the concept of compatibility, or "fit," has assumed a central role in the fields of business policy and organizational design. Research has shown the importance of the relationships amongst task, environment, and organizational variables (Ackoff & Emery, 1972; Emery, 1993; Korten, 1980). The general conclusion of this research is that the performance of an organization is a function of the fit achieved amongst the variables involved (Korten, 1980). Livestock Projects (East Africa) The East African livestock projects surveyed by Bennett (1988) may epitomize unsuccessful development programs. Bennett's survey of project papers, from USAID and the World Bank, of all the East African livestock projects in the 1970s found that no project had attained its predicted goals (Bennett, 1988). The reasons for these negative results, according to Bennett, point to extraneous factors such as social organization, status differentials, authority, and cultural customs. These factors can be summarized as a socio-cultural misfit or design problems. These design problems seem to have kept the people affected by the projects as subjects of fate unable to become shapers of their own future for they had no say, much less control, over the projects' decision-making processes (Ibid). The design of these pastoral development projects in Africa exemplifies Schneider's (1988) work on the "Principles of Development." Schneider refers to the reports, from the Harper's Ferry workshop on pastoral programs in Africa where, after 20 years and over $600 million, no pastoral program had been a success. Schneider considers the imposition of western-style ranching schemes on pastoral people as the main explanation for the failures. He indicates that no one involved in the livestock projects bothered to ask the pastoralists about the appropriateness of the ranching schemes to be implemented, assuming that their scientific and expert knowledge would suffice to make their blue-print project work. This assumption eliminated, from the very beginning, any possibility for internalizing any foreseeable negative externality. Soil and Water Conservation Projects (World-wide) One of the most comprehensive studies ever carried out to assess the commonalities of poor performance projects was conducted by Hudson (1991). Hudson reviewed 1,441 soil conservation development projects with the purpose of identifying the reasons for success or failure. According to Hudson, the most significant conclusion from the study was the importance of project design. In one third of all cases, poor design was the most important factor leading to poor performance and uncompensated effects. Overall, 86 percent of poor performance projects had design problems. He did not find any significant correlation between project budget and performance (Hudson, 1991).The strong positive correlation between project success/failure and the scores obtained from appraisal and design, reinforces the conclusion from the World Bank report (1985) about the importance of project design for success. Development Projects (World-wide) Finsterbush and Van Wicklin (1987) analyzed 52 USAID Impact Evaluation Reports on development projects carried out throughout the world. The authors indicate that they found numerous examples of successful and unsuccessful participation across the 52 cases. They studied the correlations of 15 "participation" variables with project effectiveness. They found the variables, adequacy of communication and beneficiary commitment, strongly correlated (r=0.75 and 0.67, respectively) with project performance at every level (i.e., design, implementation, and maintenance of project outcomes). They also found the variables, increased community capacity and local control, and ownership of project outputs, significantly correlated (r=0.50 and 0.44, respectively) with project effectiveness (Ibid). The study specifically refers to five cases (i.e., rural education in Paraguay, self-housing in Panama, potable water in Tunisia, agricultural research in Thailand, and water supplies in Peru) where they found that participation, its absence or misuse, was the most important factor in contributing to project success or failure (Ibid). Finally, they also found that beneficiary project relations (i.e., adequacy of communication with beneficiaries, beneficiary commitment, and ownership of project outputs) were crucial for project success (Finsterbush and Van Wicklin, 1987).
Water Projects (World-wide)
In an attempt to provide scientific quantitative evidence of the efficacy of participation in determining project effectiveness, relative to other factors, Narayan (1995) conducted a study based on multivariate analyses of data derived from evaluation reports of 121 rural water projects implemented by different agencies around the world. The project reports were supplemented by in-depth anthropological and sociological studies (Ibid). This study, specifically addressed, inter alia, the following questions: 1. Does people participation contribute to project effectiveness? 2. How important is this contribution relative to other factors? 3. What factors and strategies influence participation in collective action? 4. What are the implications for policy reform? The author concluded that the two main illustrations that emerged from the study are:
1) Beneficiary participation is critical for achieving project effectiveness and building local capacity; and 2) Rural water projects have to be fundamentally redesigned to incorporate beneficiary participation (Narayan, 1995). Participation contributed significantly to overall project effectiveness, i.e., higher proportion of water systems in good condition, greater overall economic benefits, higher percentages of target population reached, and greater environmental benefits, even after controlling for 18 direct and indirect determinants of outcomes (Ibid). Narayan examined how final outcomes were affected by the quality of outcomes at the design, implementation, construction, and maintenance stages, finding that participation was the single most important determinant of overall quality implementation and that the impact throughout the project cycle was significantly greater than it was during a single stage (Ibid). Narayan also found that local control and ownership were significantly correlated to overall participation (r=0.79). Other statistically significant factors found to strongly influence beneficiary participation were: 1) demand for the services the project is supposed to deliver;
2) organization of beneficiaries; and
3) autonomy and client-orientation of the implementing agency (Ibid).
2.6 Project Success: Sustainable by Design?
COMUNIDEC (The Andes) After three decades of development aid throughout the Andean region, a process designed and managed by the beneficiary participants themselves has become evident (COMUNIDEC, 1993; Ramón, 1995). This process has allowed for the development of "Diagnósticos Rurales Rápidos" (Rapid Rural Appraisals or RRA). RRA allow for better and faster acquisition of information and at a lower cost than conventional methods previously used (Ibid). RRA evolved to give rise to the "Diagnósticos Rurales Participativos" (Participatory Rural Appraisals or PRA). PRA aim at the training of the rural peoples so that they themselves do their own planning and become the owners of the results and consequences. With this new tool, and the support of the Fundación Interamericana (Interamerican Foundation) and the World Resources Institute (WRI), the "Planeamiento Andino Comunitario" (Community Andean Planning or CAP) came into being. The CAP is a participative and essentially democratic methodology that has allowed Andean communities to organize themselves to plan and direct their future in a given time frame (COMUNIDEC, 1993; Ramón, 1995). A key commonality in the success of 59 projects followed by COMUNIDEC between 1985 and 1992 has been their participative organizational structure. This participative structure is an overt design feature of the projects. It shows the great capacity, honesty and efficiency with which, given the right organizational environment, communities can conceive, design, and implement their own projects. The approach to project design followed by these communities allowed their members to behave as purposeful individuals in search of an active-adaptive relationship with their environments . The Community Baboon Sanctuary (Belize) Elsewhere, much work has been done, and continues to be done, in an attempt to achieve and maintain project benefits. A case in point is the Community Baboon Sanctuary (CBS) in Belize. The CBS began as an experiment to increase the population of black howler monkeys on private lands with very limited socioeconomic incentives (Hartup, 1994). The CBS project managed to achieve and maintain its objective i.e., to increase the monkey population (as of 1994). The driving force behind the apparent success of this program, as suggested by Hartup, was the commitment and active participation of the community voluntarily involved (Ibid). Given the voluntary nature of the CBS, people organized themselves in a participative and essentially democratic manner, taking ownership of the project. This approach allowed community members to become responsible and accountable for the success of the project motivated by the benefits associated therewith. The Catchment Approach (Kenya) The Catchment Approach to Soil and Water Conservation and Agricultural Regeneration in Kenya began in 1988, after 50 years of only "patchy" and "unsustainable" soil and water conservation programs (Pretty et al., 1995). In 1988, the Ministry of Agriculture considered that the only possibility to achieve widespread conservation coverage was to get people to embrace soil and water-conserving practices on their own terms (Ibid). The Catchment Approach became interdisciplinary and community mobilizing. Catchment committees articulated local priorities and provided a link with external agencies, thus maintaining a sense of ownership, cooperation, and accountability. The concept of the Catchment Approach evolved primarily due to the introduction of participatory methods which got the communities involved in the analysis of their own farming and conservation problems. Decisions and recommendations were made with the active participation of the community members (Pretty et al., 1995). This approach enabled them, not only to eliminate negative externalities, but also to generate positive ones by drawing the active participation of neighboring communities. The authors also indicate that a self-evaluation conducted in six districts found the most significant impact where there had been "interactive participation." For them, this meant that people participated in joint analysis leading to action plans and the formation of new local institutions, or the strengthening of existing ones. This approach involved interdisciplinary methodologies that sought multiple perspectives and allowed groups to take control over local decisions. This created and maintained a cooperative environment with a sense of ownership and accountability for the projects in the community, thus, giving them a stake in maintaining those structures or practices (Ibid). In participating communities, crop yields were increasing; farmers were growing a greater diversity of crops; there were more trees and ground cover; groundwater resources were being recharged; land prices and labor rates were increasing; and communities were actively replicating successes to neighboring communities (Pretty et al., 1995). The organizational structure of the Kenya project was participative, cooperative, and bottom-up. Committees articulated local priorities by means of an interactive participation, thus providing a link with external agencies. This interactive participation, which created, maintained and strengthened a sense of ownership, cooperation, and project accountability, proved critical for the success of the project and the elimination of negative externalities (Ibid). The KASHA Project (Botswana) The KASHA (Kang Self Help Association) project in the village of Kang, in Botswana, is yet another example that demonstrates the efficiency of local efforts at sustainability when these efforts combine resource considerations with human needs (Ameyaw, 1992). The KASHA project managed to build a resource center, to develop skill training programs, to implement conservation programs, and to improve the town of Kang. The framework for the KASHA's development initiatives were based on motivational and sustaining factors and strategies. The motivational factors were community self-reliance and responsibility, economic security and social mobilization. Some of the sustaining factors were strong dedicated leadership by women, openness of the Association to all Kang citizens, shared power and administrative duties, spatial linkages, local resources and initiatives, locally designed projects managed by local members, and shared communal values. Some of the strategies developed were the formation of KASHA Resource Center, capacity building, weekend learning programs, local mobilization, skills training, outreach program, and self-reliance (Ibid). A Hospital Experimental Study (USA) Another successful project, albeit in a highly "developed" context, where the key aspect for its success was its organizational structure, is the experimental study conducted in a hospital by Bragg and Andrews (1973). Based on Lowin's (1968) theoretical model of Participative Decision Making (PDM), whereby the decisions as to the activities that must be done are made by the very persons who are to execute those decisions, Bragg and Andrews hypothesized that, by creating a participative decision-making environment, employees' attitudes would improve, i.e., absenteeism would decline, and productivity would increase. The results of their 18 month experimental study indicated that after PDM was introduced into a hospital laundry department, employees' attitudes statistically improved, i.e., absence rates declined, and productivity increased. The control groups showed no improvement. The authors indicate that the performance differences between the experimental and comparison groups were statistically and practically significant (Bragg and Andrews, 1973).
Participatory Research in United States Sustainable Agriculture (USSA)
Dlott et al. (1994) present a case study in insect pest management where Rapid Rural Appraisal (RRA) methods were adapted to fit local circumstances of the California Clean Growers Association (a US peach production farmer organization) to develop a research agenda. Farmer participation in sustainable agricultural research in the United States, according to Dlott et al. (1994), has been "meager" compared to that of the "Third World." According to the authors, farmer participation in the United States has been mostly philosophical and/or theoretical. The authors indicate that use of "participatory" research strategies in USSA will require facing philosophical and methodological monoisms at the individual and institutional levels. The authors further indicate that the case study demonstrated that participatory research strategies provide effective approaches for the design and conduct of sustainable agricultural research and that farmer participation contributed with essential knowledge for the provision of relevant information (Dlott et al., 1994). 2.7 Conclusions and Lessons from Projects Reviewed The consistent theme common to both project failures and successes is organizational structure with concomitant behaviors associated with a particular organizational structure. The review of the literature on development outcomes correlates project effectiveness (success in meeting project objectives) with project structures that incorporate a specific type of beneficiary participation in design and implementation. The same literature associates negative outcomes (failure to meet project objectives, misallocation of resources and externalities) with a contrasting organizational structure that incorporates other types of beneficiary participation. Although "participation" throughout the reviewed literature of development projects takes on different colorings, it still remains as a process of human interactions. The environment (e.g., bureaucratic vs. participative-democratic) within which these human interactions take place seems crucial. The literature reviewed directly points towards bureaucratic, highly hierarchical, and non-cooperative organizational structures as the most significant underlying aspect common to all unsuccessful development projects (Bennett, 1988; Hudson, 1991; Kottak, 1985; Pretty et al., 1996; Wichterman, 1995).
An organizational structure, or project design, that generates a cooperative and learning environment conducive to effective participation, commitment, and active adaptation is seen as critical and common to the successful projects (Ameyaw, 1992; COMUNIDEC, 1993; Finsterbush and Van Wicklin, 1987; Isham et at., 1995; Kottak, 1985; Narayan, 1995; Pretty et al.,1995; Ramón, 1995 ). The project failures and successes reviewed here were not inherent to specific regions or communities. Nor were they due to financial constraints, poor science or technology, or environmental circumstances. These failures and successes do seem to have been consistently associated with organizational or institutional structures which can be categorized as either bureaucratic or participative democratic. However, this clear dichotomy is only possible in theory. In practice, organizational structures range from those which more closely resemble bureaucratic organizations to those which more closely resemble participative democratic organizations.
Part 2