The Development Elite and Institutions of the Local Poor: Experiences from a Development NGO in India

Abstract

Theory and practice of development has long been concerned about the problem of poverty and the poor communities in developing countries, which often also has a spatial dimension with a large concentration in rural hinterlands. The nature of poverty in such discourses has generally been characterized either as non-access to or non-ownership of assets or as non-access to innovation that generally occurs at the core of the mainstream economy as a centralized and capital intensive enterprise. Basing ourselves on the experience of a development NGO working, we argue in this paper, that part of the problem lies an inadequate characterization of poverty that has driven the nature of the intervention by the development elite. The poor milieu, we posit, is not isolated and is in relations with the outside 'core', whether out of its own volition or otherwise. We also argue that generating wealth out of assets or generating novel forms of asset is an institutional act that requires the local milieu to have vibrant institutions that can have large amounts of intra-trade, generating new information and deciphering new meanings. Such a local milieu can then trade and negotiate with the outside world as well, generating flow of information, resources and wealth. This could potentially generate numerous partnerships between the 'core' and the 'hinterland' leading to a dynamics where decentralized innovation also plays a competing role in driving growth. But such a positive dynamics can fail to take off if the local poor milieu lacks institutions of asset generation or has institutions that do not throw up meaningful assets to trade with the 'core'. The poor milieu therefore remains in essentially vertical relations of exploitation or nonchalance. The role of the development intermediary, in this model, is then to either foster new institutions or help modify and valorize incipient institutions of the poor that can generate value through new linkages with the 'core'. We argue that the new approach, if taken, can open up new possibilities.

Keywords: poverty, decentralized development, development elite, institutions, innovation, India, and rural development

JEL Classification: O17, O18, O29, I32