FOURTH REGIONAL THEMATIC FORUM
Harvesting Opportunities: Rural Development in the 21st Century

Concept paper by Franka Braun and Indu John-Abraham¹

I. Objectives and Rationale
II. Background
III. Conceptual Framework

I. Objectives and Rationale
The Civil Society Team for Latin America and the Caribbean Region organizes an annual Regional Thematic Forum (RTF) as an opportunity to engage simultaneously with actors from civil society, the private sector, governments in the region as well as the World Bank on timely and relevant issues. Growing debates on equity in the most unequal region in the world has forced a closer look at who are the poor, and where and how they live. In a region that is also known for the fastest rates of urbanization, poverty, particularly extreme poverty, remains largely rural. In the context of these disparities, the IV RTF seeks to explore the issue of rural development in the face of urbanization, decentralization and globalization.

I.A General Objective
The IV Regional Thematic Forum seeks to facilitate the exchange and learning among stakeholders around strategies to promote economic and social opportunities in rural areas in the context of international integration and as part of an integral approach to national development.

I.B Specific Objectives
1. To learn about the context and conditions for sustainable rural development.
2. To share and exchange lessons and experiences among actors on mechanisms to address key areas in rural development.
3. To explore opportunities for key stakeholders to assume a more effective role in advancing the mechanisms for sustainable rural development.

I.C Rationale
At this juncture, as rural takes on new dimensions in the face of long-standing challenges, the IV Regional Thematic Forum seeks to stimulate dialogue among stakeholders within and among countries in Latin America to share experiences from their unique perspectives and present strategies to address the increasingly complicated conditions for rural development. The RTF provides an opportunity to present diverse opinions, mutual learning and collaboration around common objectives. In doing so, it is hoped that the RTF will allow participants from civil society, the private sector, government and the World Bank to share and learn from one another by presenting their visions for this very multidimensional and often disparate issue. In addition, it is essential that adequate information on the varying perspectives be presented, so as to ensure that common assumptions be replaced with facts, based on academic research, policy papers and real life cases of rural development on the ground.

The RTF also will offer an opportunity for participants to take stock of the different experiences in rural development in the region. By extracting lessons learned from innovative approaches to rural development, participants from the different sectors can learn, evaluate and respond accordingly to similar challenges. Finally, the RTF provides a forum for dialogue among often disparate actors in the region on an issue that is of priority importance to many client countries. This concept note presents key issues in addressing "rural development in the 21st century", and the critical questions the RTF seeks to investigate. The remainder of this paper will present the proposed conceptual framework for the event.

II. Background
The term rural traditionally has been, and to a large extent continues to be, popularly synonymous with agriculture. However, due to the diversity of the rural sector and the variety of changes by which it is affected, this paper understands rural development as the utilization, protection, and enhancement of the natural, physical, and human resources needed to make long-term improvements in rural living conditions, provide jobs and income opportunities, and enrich cultural life while maintaining and protecting the environment of rural areas. The socio-economic transitions of the recent past have generated new challenges for rural development, specifically in terms of globalization, governance and technological change.

The dynamics of industrialization and urbanization in the region have dramatically transformed the landscape of rural life. The increasing freedom of movement of people within and beyond borders has resulted in a mass exodus from rural areas. In 1960, over half of Latin Americans lived in rural areas; today it is less than one-quarter. With the promotion of non-agricultural industries in and around cities, people have flocked to where the jobs and services are. At the same time, rural employment has changed. Rural non-farm (or non-agriculture) incomes (RNFI) now account for approximately 40 percent of rural incomes. Recent evidence demonstrates that "(i) non-farm wage incomes exceed self-employment incomes; (ii) RNFI far exceeds farm wage incomes; (iii) local RNFI far exceeds migration incomes; (iv) service sector RNFI far exceeds manufactures RNFI". This shift towards industrial development bears significant implications for new areas for growth and poverty reduction in rural areas.

While serving divergent goals, the supply-driven import substitution (ISI) strategies of the 1950s-1970s and the structural adjustment reforms adopted in the 1980s by most Latin American countries generated top-down approaches for industrialization, often at the cost of rural and agricultural development. Special support was accorded to relatively wealthy farmers and landowners and/or more promising manufacturing and industrial sectors in urban areas. Since the beginning of the 1990s, increased attention has been attributed to the revitalization of the agricultural sector: "Under the new market based, trade driven system, economic growth and national competitiveness are dependent on the development of a dynamic agricultural sector. Countries such as Chile, Indonesia, Malaysia, and Thailand have grown and prospered by investing in their agricultural sectors". Coupled with this search for new approaches, the democratization process in the region generated extensive reforms towards decentralization. As the local government assumes greater responsibility, governance issues are critical to the implementation of effective rural development programs. The complications faced by decentralization are further compounded in the rural context. The issues of declining economies of scale, dependency on central government transfers, discrepancies between administrative vs. natural affiliations and representation are often magnified in the rural areas where the gap in capacities and the dispersion of the population reinforces the strains of decentralization. Despite the macro-level reforms that have occurred in much of Latin America in the past two decades, they have been unable to remove the structural impediments to empowerment and development of the poor. "Second generation" reforms to respond to problems of inequality, competitiveness and access to economic, social and physical resources remain a challenge, particularly at the local level.

Some argue that the process of globalization has placed the Latin American peasantry under a "double underdevelopment squeeze", lacking adequate access to land or employment. The causes of which have been attributed to: (i) the development of the commercial/export agricultural sector linked to the use of subsistence farmers as wage laborers; (ii) highly inequitable distribution of resources, jeopardizing small producers and the environment; (iii) urban and export bias; (iv) increasing population with decreasing resource base; and (v) environmental degradation as a result of expansion or intensification of land use by small-scale farmers. Trade policies further complicate this situation as the demand for low cost, high quantity products crowds out small agricultural producers.

Yet the impacts of the rural sector continue to weigh heavily on national development. While the contribution of agriculture to GDP in much of Latin America has been declining (less than 10 percent of GDP in the region) , a large share of the labor force continues to work in the agricultural sector. In Mexico, primary agriculture accounts for 20 percent of the labor market; in Central America the average is 57 percent. Rural inhabitants still also constitute a sizeable share of the population in much of Latin America. In several of the low-middle and middle-income countries, including Nicaragua, Guatemala, Paraguay, etc., 40 percent or more of the population lives in rural areas. More striking than these numbers is the nature of life for rural inhabitants. The legacy of poverty still remains a continuing reality for nearly 78 million rural citizens of Latin America, accounting for 62 percent of the poor in the region, and the majority of the extremely poor in all Latin American countries. , Even in middle-income countries in the region, a large percentage of the poor live in rural areas. The high levels of inequality that typify the region are seen very evidently in the highly unequal levels of land ownership and access to assets, inhibiting inclusive patterns of growth. These inequalities can also be evidenced in the access to public services in rural areas. In many countries, great disparities remain in the availability and quality of water and sanitation services, electricity, health and education. For example, in countries such as Bolivia and Peru, rural students receive less than 7 percent of the total per capita national public expenditures for education. Ethnicity also has played a role in rural poverty. The rates of poverty among rural indigenous populations in comparison to rural non-indigenous people are over 30 percent higher in Bolivia, Guatemala, Mexico and Peru. These discrepancies have been attributed to the wage differentials between indigenous and non-indigenous rural populations, the educational levels between the two groups, as well as the persistence of discrimination against indigenous people.

III. Conceptual Framework
The revolutionary transformations in Latin America through urbanization, industrialization, globalization and decentralization at the turn of the 21st century consequently have produced radical impacts on the previously dominant, isolated and centralized rural sector. Questions are increasingly being raised as to how the rural sector will or should evolve to respond to this new reality. The essential question guiding the debate is how economic and social opportunities can be promoted in rural areas in the context of international integration and national development.

Fundamental to that debate is a common understanding of what is rural, and its value for both, local and national development. Therefore, this section will first highlight the importance of the rural area to national development. Secondly, it will discuss the territorial approach to development as a strategy integrating the rural into a broader development context that overcomes the old top-down approach, which failed to recognize the importance of participation and decentralization. Within this framework, a more detailed analysis of the key areas of policy intervention for rural development, and elements of analysis and factors to address these issues, will be evaluated. This section will include key questions to each policy area that are meant to stimulate debate around these issues. Finally, an integrative table will present concrete policy actions or mechanism to tackle the key areas of rural development

III.A. Importance of the Rural in the National Context
As Latin America has become highly urbanized and generally less dependent on agriculture, what impact does the rural sector now have on national development? The sheer numbers alone of rural population, poverty and ethnicity demand attention. A closer look into the demographic statistics reveals contentious issues of inequality, exclusion and isolation contributing to social and political discord. The on-going struggle to define property rights of land in most Latin American countries strains the process of poverty reduction and empowerment of the poor and even "may widen pre-existing inequalities and tensions rather than reduce them." The disadvantaged status of minorities living in rural areas, particularly indigenous people and women, disproportionately increases their vulnerability to poverty. This "underprivileged" status also has been the source of increasing social tensions, especially in countries with large indigenous populations. Also, many of the rebel movements in Latin America began and flourished in the countryside, from Mexico to Colombia to Chile due to the sense of disenfranchisement and isolation of rural communities. Recent history has shown that these communities have been willing to take extreme measures to be heard. Rural development strategies can offer solutions to problems that cause social unrest such as inequality, social exclusion, un- and underemployment, and land disputes.

The freedom, rights and opportunities promised by democracy remain a challenge for most citizens in Latin America. The democratic transition has not demonstrated the significant impacts on development as anticipated. This struggle has proven all the more dramatic in rural areas, which are often physically, economically and culturally disconnected from other areas, both inside and outside of the country. At the same time, the process of democratization and economic openness also has increased the political will and participation to generate cross-sectoral linkages and networks to address and incorporate innovations in rural development.

Beyond the socio-political implications, the rural sector also bears significant environmental impacts that affect the whole society. Latin America remains a region well-endowed with natural resources, "with more than half of the world's tropical forests, major biodiversity reserves and around one-third of the world's fresh water" . Yet the amount of tropical forests cleared annually in Latin America is nearly as much as that in Asia and Africa combined. Much of the remaining natural resources are concentrated in rural areas. High rates of mismanagement or degradation of natural resources are closely linked to rural poverty. Therefore, increased attention is paid to effective natural resource management (NRM) at the local level that promotes environmentally sustainable investments and farming systems based on more efficient resource use leading to increased returns to smallholder land. Improved income could in turn result in an expansion of rural farm and non-farm employment thus reducing migration to marginal lands, which generally causes additional environmental damages (s. C.4) , and to urban areas. Benefits of improved NRM and conservation practices will not only be felt at the local level since they are requisites for the protection of global biodiversity as well as for air, water and soil quality. In addition, natural resources also contribute to the development of other sectors of the national economy, such as energy, tourism, etc.

Finally, the rural sector still maintains a crucial economic value for national development. Despite the declining share of GDP attributed to primary agriculture in Latin America, the debate continues on the primacy of agriculture to national development and the fight against poverty. A World Bank study on agricultural reforms in a number of developing countries pointed out that agricultural growth rates exceeding 3 percent a year had a significant impact on poverty reduction whereas poverty was not reduced in any case when agricultural growth was less than 1 percent. Also evidence from much of the industrialized world has demonstrated that agriculture has been a principal vehicle for development. From Sweden to the United States, agricultural development, and its eventual industrialization, has been fundamental to their economic development. At the same time, recent data suggests that non-agricultural activity may generate greater poverty reduction outcomes than agricultural activity alone. Others would state that the full potential of the agricultural sector has not been fully exploited to produce its maximum returns. Still others would suggest that other critical productive activities centered in rural areas, including agro-industry, could produce more dramatic local and national outcomes.

In addition, the availability and cost of food is fundamental to immediate survival as well as poverty reduction, as the poor generally spend large proportions of their incomes on food. Increased productivity of agriculture may improve food security and at the same time free larger shares of incomes for the consumption of other goods, including education, thus stimulating the economy.

The impacts of the rural sector on national development are far-reaching. What remains to be determined are the most effective mechanisms to promote opportunities in rural areas through an integral approach for national development.

III.B. Approaches to Rural Development
B.1. Overview
Various approaches have been and continue to be applied towards rural development. A traditional political or administrative approach, which relies on the legal delineation of governmental administrative jurisdiction, remains a common strategy applied to managing actions towards rural development. Due to the limitations of smaller administrative units, many countries have developed regional structures to conglomerate wider interest groups. Another approach commonly applied to rural development has been the sector approach, which expands the geographic area under consideration, while narrowing the area of intervention. But one of the strategies for rural development that is receiving a great deal of attention is the territorial approach to development. This will serve as the primary strategy of analysis for the RTF given the current and active debate surrounding this more recent approach to rural development.

B.2. The territorial approach to rural development
Given the limits of rural development programs that functioned through centralized structures, the territorial approach seeks to bring the design, implementation and monitoring of development programs to the local and subregional level towards a common strategy for resource mobilization and economic development. Yet rather than conducting programs in relative isolation, sector-by-sector or village-by-village, territorial development offers a strategy to reach beyond administrative borders to areas that are more natural constructs, whether as defined by a watershed, ethnic identity or a common priority among communities. Thus, this strategy also allows to take into account the influence of the diverse geographical factors characterizing the region.
It responds through a multi-sectoral approach, linking key stakeholders (local government, producers and the private sector, civil society organizations, decentralized sectoral authorities) through local decision-making structures that are connected to the subregional and national sphere. The territories are areas of various productive activities, or at least potential, offering various complementary goods and services. This strategy also emphasizes the importance of linkages between rural and urban sectors and questions of governance. Territorial development aims to bring rural areas closer, not necessarily to the capital or metropolitan areas, but to towns or secondary cities, presenting greater opportunities for access and resources. A system of territorial development councils, implemented at the state, subregional and municipal level, can help to institutionalize this integrative approach. Territorial development activities are exemplified as demand-driven, which are often community-driven, development programs.

This strategy remains under close scrutiny, as evaluations on territorial development programs are quite limited. Also, the complexities of coordinating decision-makers from various levels and various interest groups prove a clear challenge, and overcoming those challenges remain an area of great debate.

III.C. Key Areas of Policy Intervention
Whereas fighting rural poverty has for a long time focused on a single sector - agriculture - there is general agreement that the roots of rural poverty are multifaceted. Tackling the main causes of rural poverty therefore requires an "assault on various fronts" . Whereas the unresolved agrarian question in Latin America still remains of major importance for the region, other closely related issues need to be addressed simultaneously. The main areas of intervention and key resources for the alleviation of rural poverty include (i) Secure Land Tenure, (ii) Infrastructure, (iii) Human Capital/ Migration, (iv) Natural Resource and Biodiversity Management, (v) Agricultural Research and Extension will be presented in the following sections. Each section will conclude with questions central to the issue discussed which are meant to stimulate the debate around the respective topic.

C.1. Access to Land and Tenure Security
Despite the majority of Latin American countries committed to agrarian reforms in the past, high inequality in land distribution due to the scarcity of land, due to a legacy of highly unequal access to land and the concentration of land that still prevails in the region. Land, however, is a key asset for the rural poor since it builds the basis for economic activity in rural areas and allows for access to credit. Thus, land is a main vehicle for investing, accumulating wealth and transferring wealth over generations. Given its economic and social importance, struggle over land has also been at the root of many historical and contemporary conflicts in the region. Secure land tenure therefore is critical for the reduction of rural poverty and contributes to tackling the causes for social and political unrest.

Whereas land is often mainly associated with and analyzed in terms of agriculture use and productivity, aspects related to secure land tenure such as the impact of land rights on the empowerment of the poor, improved access to land through land transactions and different tenure regimes, improved local governance, gender and equity aspects of land ownership have been and remain crucial to reducing poverty and empowering poor people. Policy makers, decision makers and the donor community have still not given enough attention to the impact of secure property rights to land on economic growth, poverty reduction, empowerment of the poor and local governance. Yet there is general agreement that clearly defined property rights can maximize the potential of rural areas for expanded use of land, increased investment and the transfer of lands at low transaction costs. In addition, advocates of a market based approach to land distribution argue that secure property rights coupled with land distribution regulated by supply and demand of land buyers and sellers that could be reinforced by land taxation might encourage landowners to reduce their holdings of underutilized lands and increase the revenue of local governments. Some point out that in addition, those with possession over property rights will be given a greater voice thus being empowered to participate in local development processes. Others, however, argue that land policies focusing on land titling, registration and land taxation if not accompanied by coercive distribution measures (expropriation) can debilitate the position of peasants and small holders because of their already weak position in the market and in the political system. If the socio-political environment and institutional framework do not allow for the effective protection of rights of small farmers, they risk to switch from landlessness to "modernizing insecurity" .

The complexity of land reform implies the need to integrate land reform processes into a broader context of economic and social policies aimed at development and poverty reduction, and to implement programs in a decentralized way with maximum participation by potential beneficiaries.

§ What are the viable options for distributing land that are cost effective and increase equity?
§ What options would increase land security for all types of land tenure regimes (communal tenure, family tenure, etc.)?
§ What options exist for easily accessible conflict resolution mechanisms?
§ How can locally based mechanisms and administrative services be strengthened to facilitate access to land tenure?

C.2. Infrastructure
The quality of infrastructure has important impacts on the quality of life in rural areas. The availability and reliability of productive, economic and social infrastructure investments dramatically impact the potential of rural inhabitants to access services, such as water/sanitation, electricity, roads, irrigation, etc., for development. In most rural areas it is essential to address the following three key challenges (i) improve the access to infrastructure for those who are still underserved, (ii) improve the quality, efficiency and sustainability of existing infrastructure services in rural areas, (iii) maximize the impact of rural infrastructure investment on economic development and poverty reduction. Whereas the improvement of quality, access and coverage of infrastructure remains important, increasing attention is paid to income generating potential of services in order to contribute to broader rural development objectives. Services such as road maintenance can both directly provide employment opportunities for local residents and improve access to other job markets. Electricity in rural areas can be used for processing agricultural products, non-subsistence agriculture or non-agricultural activities (e.g. milling grain, use of electric motors for equipment repair). In a similar manner, the productive use of information, telecommunication and internet services remains to be explored.

The effectiveness of public institutions to develop and manage infrastructure programs and networks serves as a key variable in its usefulness to rural development. Decentralization increasingly shifts the responsibility for the planning and provision of infrastructure services to municipalities. However, these often lack the technical, financial capacity and incentives to comply with the challenges outlined above. Therefore, private sector involvement in infrastructure provision is increasing. In addition, coordination and planning across institutions in charge of providing rural infrastructure services accompanied by capacity building and monitoring and evaluation of development objectives and indicators is likely to improve effectiveness and efficiency of rural infrastructure planning.

§ What are the requirements necessary to improve access to infrastructure and improve quality and sustainability of existing infrastructure services ?
§ How can cross-sectoral planning and coordination of infrastructure be promoted ?
§ What are the benefits of public, private and civil society partnerships for efficient infrastructure planning and management ?

C.3. Human Capital/ Migration
The concept of human capital encompasses issues of education, health and social protection. Expanding the delivery of basic education and health services to rural areas requires taking into account the specific dynamics that characterize the rural space among them the high rate of rural-urban migration in the region, changing gender relations, and cultural issues.

The migration of labor out of rural areas and out of agricultural activities increasingly impacts rural economies and social patterns in rural areas. Although natural population growth is higher in rural than in urban areas, many countries in the region have experienced decline in their rural populations shares over the past decades due to 'rural out migration'. While some policy makers seek to maintain rural-urban migration at manageable levels, others argue that migration flows will probably continue to increase.

Education and capacity building can contribute to both: to improve human capital in rural areas in order to improve productivity and foster investment in rural areas as well as to better equip the rural poor for their migration decisions. Reforms of the education system and the design of rural curricula closely linked to labor markets contribute to building human capital and labor prepared for the transformations of the rural space (s. 5). In addition, human capital theory suggests that improved skills become an asset in accessing better employment opportunities in non-farm activities and urban economies. Rural-out migration not only has an impact on the migrants themselves and on the receiving communities but also on non- migrants staying in the migration sending communities. In addition to investigating on the social and economic impacts of migration on the local economy and livelihoods, the developmental impact of remittances receives increasing attention from academia and the development community.

The pervasiveness of rural poverty among ethnic minorities and the increasing role of women in rural society raise the issue of social inclusion and approaches of building human capital more adapted to cultural differences and gender needs, such as bilingual education and education of girls. The role of young people also needs to be recognized more pro-actively as the engine of the future transformation of the rural sector. They represent a dynamic sector of society, able to introduce new technology and establish networks and knowledge, and a development potential that should not be lost or left in the same poverty pattern as those of the previous generations.

Whereas the extension of primary education to rural areas gradually improves , it has been pointed out that secondary education remains especially problematic in rural areas because of lower population density as well as local budget constraints. In fact, school enrollment of 6-11 year olds is 88 percent in rural areas in LCR and as high as 73.5 percent among 12-14 year olds whereas school enrollment of above 15 year olds is only 47 percent.

Since limited access to health services in rural areas significantly aggravate consequences of being income poor rural development strategies also need to address questions of health, child mortality, nutrition and social protection.

§ Which impacts does migration have on the economic and social context in the rural space ? How to face them ?
§ How can the developmental impact of remittances be improved ?
§ Which investments in human capital are necessary to increase school attendance and enrollment rates in rural areas?
§ Which skill mix should rural curricula propose to address the transformation of the rural space?
§ Which investments are necessary to expand health and social protection services to rural areas?

C.4. Natural Resources and Biodiversity
The sustainable use of natural resources is one of the biggest challenges facing the rural sector in the LCR. The region "has about 21 percent of the world's total of potential arable land, 12 percent of its cultivated land, 46 percent tropical forests rich in biodiversity, 31 percent of the world's fresh water and 48 percent of the developing world's annual renewable water resources". However, LCR faces severe problems of soil erosion, over 15 percent of the world's degraded land is located in Latin American countries , pollution due to intensive agricultural production and the use of agrochemicals, as well as extensive deforestation. Most of these environmental degradations are closely related to rural poverty, "given that in Latin America many marginal and resource poor lands are likely to have been previously forested, and that low potential lands are prone to chronic land degradation, it is likely that a strong rural-poverty-deforestation-soil degradation link" exists. This "cumulative causation" is introduced by poor rural farmers leaving degraded land in order to deforest and crop poor frontier forested lands leading to additional degradation and land abandonment which, in turn, pushes the agricultural frontier further into forest areas and reserves. The development of biotechnologies also has dramatic impacts on natural resource use and management. These environmental damages have implications for the national, regional and global arena. Therefore, Natural Resource Management (NRM) demands attention to issues within the agricultural sector (policies, technology, institutions) as well as outside of it (economic and political stability, education, transport, communications, etc.).

The key issue for a long-term strategy of development programs is to manage natural resources in a sustainable way in order to improve effective use of local resources and to contribute to the national and global environmental protection including biodiversity, water and soil quality. Natural resources also contribute to the development of energy, tourism and other sectors of the local and national economy.

A number of mechanisms and instruments capable of better integrating productive, management, and conservation concerns exist: regulatory and administrative bodies responsible for national resources, integrated management of micro-watersheds at the community level, participatory and decentralized planning and management of natural resources, promotion of soil conservation practices, design of instruments to compensate farmers for the external benefits generated by more environment-friendly practices, regulations and improved cultivation practices to reduce soil and water pollution caused by pesticides.

A continuing concern will be how to upscale the impact of environmental programs by mainstreaming conservation into development. The search continues for instruments facilitating the integration of cross-sectoral issues and multi-level interventions.

§ How can the impact of environmentally sustainable policies be scaled-up?

C.5. Rural Research and Extension
Research and Extension is one of the main areas for intervention to promote rural development. In agriculture and the rural economy, knowledge and decision-making capacity determine how production factors, such as land, labor, cattle, water and capital, are utilized in an efficient and sustainable way. Focusing on discovering new technologies and techniques - as well as adapting existing ones to the ecological, productive and cultural conditions of the rural space- are important for the promotion of technological change. This in turn can increase the productivity of agricultural and increasingly important non-agricultural activities in rural areas. The objective of research and extension is thus to assist farmers and producers in improving their production and marketing strategies and to make technologies available to all producers through rural extension programs. Capacity building of producers on new tools and instruments, utilization of new pest control mechanisms, vaccination of cattle, the support for the establishment of small producer cooperatives, are examples of this area of intervention.

For these activities to be effective, the establishment of an effective rural knowledge system is required by (i) fostering the interaction among the principal actors of rural research and extension including agricultural researchers, rural entrepreneurs, producer and farmer organizations, political officials, non-governmental organizations (NGOs), training centers, technical research institutes, the media, etc., and (ii) promoting the organization of locally based knowledge and research institutions and information dissemination systems, thus also contributing to the empowerment of rural communities.

§ How can the impact of rural research and extension be maximized and reach as many farmers as possible ?
§ How should rural research and extension take into account the special needs of women who perform an important part of agricultural tasks ?
§ How do processes of economic integration and international trade influence the need for rural research and extension ?

III.D. Elements of Analysis and Mechanisms
Different elements of analysis including (i) institutional framework and governance, (ii) access to markets, (iii) access to financial instruments, (iv) capacity building, (v) technology and (vi) monitoring and evaluation interact with each of the above discussed areas of intervention and may be considered as critical underlying elements for the effective implementation of rural development strategies. (i) A territorial rural development approach will require an improved framework of public institutions aimed at sectoral integration, linkage between rural and urban and local and subregional levels, and increased participation of the local actors and beneficiaries of rural development programs. In addition, a stable regulatory framework conducive to more effective private sector participation and better functioning, transparent markets will produce an enabling environment for rural development. A strong institutional framework will help to increase efficiency of resource allocation, facilitate private sector investment and improve cross-sectoral planning e.g. linking infrastructure planning to private sector development and environmental issues. In addition, improved institutions and good governance will also facilitate (ii) access to markets which in turn will provide the rural area with products and goods needed to improve quality of life and to carry out rural business operations. On the other hand, better access to markets will help smallholders to locate demand for rural products and services thus providing them with opportunities to expand their economic activities to new markets. Access to markets will be enhanced by (iii) access to financial instruments as a critical factor for the development of each of the key areas of rural development. Sound financial instruments facilitate the long-term investments required to diversify and modernize production, improves economic opportunities of small enterprises, makes new technologies available and facilitates investment in non-farm activities. (iv) Capacity-building is crucial to help local actors adapt to changes in the context of globalization and market liberalization and to prepare them for efficient planning and implementation of demand driven, integral and participatory rural development programs. (v) The development of new technologies and knowledge proves critical to maintaining the competitive edge in the market. The development of the rural economy depends heavily on gaining and maintaining this edge. Finally, in order to identify the link between rural policies and outcomes, rural development strategies should include (vi) monitoring and evaluation activities so that this information can be shared among all actors involved.

Each of these elements provides a variety of policy actions and mechanisms which will support and enhance the development of rural development strategies. These activities are outlined in table 1.

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¹With contributions from Katherine Bain, Osvaldo Feinstein, Jonas Frank, Pilar Larreamendy, Daniel Lederman, Jorge Muñoz, Monica Peñuela, William Reuben, Jennifer Sara, Maria Poli and Roby Senderowitsch. This paper was developed to stimulate discussion and comment within the development community. It does not reflect the opinions of the World Bank, its affiliated organizations, its Board of Executive Directors or the governments they represent.