|
Alejandro Natal MARTINEZ
Interdiciplinary
Programme for Third Sector Studies at El Colegio Mexiquense, and
CITIDEP Mexico.
E-mail: anatal@cmq.colmex.mx
ABSTRACT
This article discuss on the information costs information poor face in their development process. It intends to draw a basic framework for the analysis of the costs of information in rural settings. It analyses specially the cases in which development programmes have intended to build collective action for service provision. It focuses on the costs and benefits attached to the process of searching for and managing information for service provision that rural communities have. In particular, it argues that the costs of getting relevant information for service provision are specially high for rural communities. It contends that these costs can represent serious constraints for communities to provide for themselves.
Even when there is some recognition that some development has been brought to the rural poor, it would be difficult to argue that it has not always brought enough social benefits so as to make poverty alleviation selfsustainable. Projects intended to help people out of their poverty have, in general, not only been unsuccessful in reaching the rural poor , they have unevenly distributed the benefits of development, and thus, contributed increase inequality.
Causes of this failure can be found in many aspects of development administration. One of them is, from our point of view, the approach followed. Participation for community development is the latest strategy in a large tradition of concepts which have guided rural development in a particular direction (1), and that have moved rural people through specific processes of social change. This strategy created large controversy on the way and the extent to which the rural poor should influence or have control over development initiatives, and over the decisions and resources which affect them. However, it became very influential despite its weak conceptualisations and lack of rigour in the observation and analysis.
This paper is part of a larger study conducted in rural communities in central Mexico. Here, for reasons of confidentiality we will refer to them as C1, C2 and C3. All of them have undertaken a participatory approach for the provision of services needed in the communities, in an effort to develop through this mechanism. However, it is our contend that one of the major limitations they are facing, and that we believe is a cornerstone problem in rural development, specially when collective actions is required, resides in how communities access, use and organise information they need to provide services for themselves. This we discuss below.
This paper discuss on the costs of information that rural communities face, mainly when they involve in collective action for service provision. The paper intends to build a model for the analysis of information costs in rural areas by classifying the different information related problems in two main categories, which are the main parts of the paper. The paper is divided in four parts. The first, presents a brief theoretical introduction to the problem analysed. The second, discusses a series of costs we identified as the result of incomplete information problems. The third, analyses some of the costs related with differentials in information. We end this paper with a summary that tries to present a brief overall picture of what was discussed.
To produce collective action for service provision, implies to face a series of information related problems. It is our contend that these problems can be particularly high and that they seriously limit the possibilities of rural communities to effectively provide for themselves.
In the cases reported by this paper, information costs appeared in three major forms. First, the actual problem of searching for relevant information. It is not that communities do not know what they want but that they do not have the relevant information for effectively producing services for themselves or any other goods they want.
Second, when put to decide collectively is likely that some individuals will use the information they have, regarding their needs, activities and interests, to pursue their own benefit. Third, when individuals have to decide, they search for information in those who they have more trust on. It is also likely that individuals will associate with others with common interests, and hence with common information.
The first and second set of problems are related with incomplete and asymmetric information. The third set of problems is derived from, what we will call here, the political economy of information of a community.
Information related problems in collective action have been very rarely explored. Ostrom's work is the single most important contribution we have found in the area (Ostrom, 1993). Others, such as J. Fox, have detected and reported on information costs in their field work but have not specially explored them (Fox, 1996). The enormous troubles communities face to gather information and the solutions they give to these problems remain largely underesearched.
Until now we have not been really able to understand information related problems in collective action, for the participatory approach is based in assumptions that somehow deny the existence of information costs.
Although they are never clearly stated, the more radical advocates of participatory development seem to base their approach to community decision making in the following assumptions:
(a) Individuals have perfect information.
(b) There is unlimited trust. They feel free to disclose and share the information they have looking the benefit of the community as a whole.
(c) Co-operation and solidarity are the premises of individuals behaviour and choices. Individuals would eventually subordinate their personal interest to the good of the community as a whole, and conversely, they can expect their points of view to be taken properly into account.
(d) Community is a unity of interests.
Advocates of participatory development have the tacit premise that the community, will behave as a unity of interests. They believe that individuals will easily agree and will choose to coooperate for the construction of the collective goods. For competition between the poor is not acknowledged the possibility that certain individuals can use information as an asset to put forward their own interests and maximise their benefits has not been really recognised.
We believe that this assumptions on participatory decision making are highly partial and naive to say the least. More radical authors working with the question of participation have been led more by the good will to improve the conditions of the poor than by a more rigorous analysis of the reality they face. By building on successful cases of co-operation, that do indeed exist, they have romanticised the overall, largely underestimated real-world problems that individuals in rural areas face when providing for themselves.
Most authors have overseen, for instance, the information problems communities face and its serious implications to participatory decision making, and consequently to community sustainable development.
Important bodies of knowledge have suggested, however, that information related problems are the major constraints individuals face in decision making (Simon, 1961 ).
These problems have been studied and thoroughly analysed in such different contexts such as markets, firms (Williamson, 1985), sustainability of rural infrastructure (Ostrom, 1993). In the city where individuals have all the possible technology to access information participatory groups face serious information related troubles. It is also well known that counties have to make big efforts so as to break barriers to accessing information (see Agenda XXI). In rural communities this problems magnifies. Rural people have not always the skills and face serious structural problems to access information that allow them to efficiently and sustainable provide for themselves. This is not a patronising statement, au contraire, is the recognition that individuals in rural communities, though having all the capacity to decide on their own future not always can for they are missing relevant information that allow them to actually do so. If participatory development is going to work for the rural poor individuals have to have access to the relevant information that allow them to make pertinent decisions. The development of effective mechanisms that facilitate them to reach the information they need is a pressing need on participatory development research and practice.
In order to know how to design these mechanisms we have first to account for what happens, i.e., which are the costs people face when processing information and how have they intended to solve them. This is what this paper explores.
In order to analyse what the information problems the rural communities studied were facing when providing for themselves we applied the analysis of information costs mainly as developed by Akerlof (1970; 1986), Ostrom (1993) and Williamson (1985). To analytically approach the problem we initially divided it in three stages or sets of questions , that we put in form of questions:
(1) What information did people have?, which has been referred to in the literature as `local knowledge' or as `time and place information' (Ostrom, 1993); how people were organising this information to collectively decide on which services to provide; and which were the costs the individuals of the communities studied were facing in the process of bringing together, aggregating and sharing information?
(2) What information did people need?, how did they access technical information when they needed it; and which were the costs associated to the process of searching for this kind of information.
(3) How (1) and (2) impacted participatory service provision.
It is sustained by advocates of participatory development that people know better their needs and that if they achieve self-reliance they will be better abled than no-one else to provide for themselves. It is commonly said that communities have relevant information on contextual factors, such as climate, heights in rivers, drought periods, etc. and on institutional ones such as culture.
In the communities studied people had relevant information they were indeed using to provide for themselves. In C1, for instance, when building the water piping network the knowledge of old people proved to be highly valuable in assessing, first, where the better well were and, second, in designing where the network should pass through for they knew which soils were less sandy and therefore lees probable to collapse after the first rain season. In C2, local information proved also to be very appropriate in the construction of a dike to contain the heights of the lagoon which borders the village. The memories of old people were impressively clear in pointing the heights that the lagoon had reached in years of great heights.
However, as we argue in this paper, though people have indeed relevant information on time and place conditions, this alone is not enough for communities to make adequate decisions on what and how to provide for themselves. Moreover the actual process of aggregating the information the community already has, sharing it and using it to decide for the common good is not costless. This we discuss in the next section.
In Mexico technological information tends to be scattered and underprovided in rural areas. Structural conditions of poor and isolated communities create a market for information plagued with failures, and therefore is very likely that communities suffer problems of incomplete information. For the communities studied by this research this was not an easy task. Communities providing for themselves have to incur in a series of costs so as to collect and aggregate the information they need(4).
Incomplete information costs in participatory service provision, are a consequence of the facts that (a) there is not a single individual with all the information on what the community as whole wants , (b) that community decision makers have not perfect foresight, and (c) that there is always information that needs to be searched outside the boundaries of the community (5).
What we observed was that the process of gathering information at the interior of their own communities was not the easy cake some authors portrait. There were costs associated to the process of aggregating local information. The second point, the searching of information outside the community was indeed more problematic and the incapacity of some communities to solve it was driving the participatory process to a stale-mate. Difficulties to access information were forcing them to make not the choices they want but those they had information for. They chose what they knew.
From people responses in our interviews we found several major costs attached to the problems of incomplete information in participatory service provision. We have classified these as: the development costs, which are the costs attached to the development of an idea; costs of aggregating information, which are the costs of gathering local information; and the costs of searching for information, which are the costs implied in the process of searching information outside the community; ex-post incomplete information costs, which are those costs only realised when the service infrastructure has been finished. The four are very related but is important to analytically differentiate them.
Development costs are the costs of information attached to the process of creating an idea. This imply the time, effort and opportunity costs an individual or a groups of individuals have to sacrifice so as to bring about a proposition to a larger group of associates. To explain ourselves, lets suppose, for instance, that you find a magic lamp with a genius ready to give you one single desire. For whichever reason you chose to have "the house of your dreams", and so you say to the genius. However, he is not the type that read minds, and therefore he asks, how does it looks like?. The thing is that not even you know the overall picture of how it should look like. You would have then to imagine it, piece by piece asking yourself questions on how many rooms it should have, the size of them, where the windows should go and which colour the house should finally have. As you know that it is going to be the family's home, for several generations, you will be willing to shop around in your own memory of films and holidays and carefully evaluate the possible options. For you as for any individual trying to design his/her own house it may take several hours, or even days to organise the information you already have. The fact that people that can afford it hire an architect to do the job of designing and thinking suggests how costly the process can be.
This is also the case of development products, for firms have realised that the development of new products can be very costly, they have created R&D departments in which some individuals dedicate exclusively to it.
In terms of self-help service provision development costs are those which individuals have to incur in so as to imagine, visualise, and develop an idea of what and how to provide. Development costs are information related for they imply the organisation of already existing information. As a participant in the construction of a school put it :
"... one thinks in a classroom and imagine a big room. One never went to a modern school...So you have to imagine everything, the size, where the children will sit, the windows,...everything!".
Development costs are not minimal. In the communities studied some people literally devoted entire days not to decide on what to provide but in imagining how the actual facility should look like. These processes we accompanied and in most cases not only took quite a long time but also imply serious opportunity costs to individuals developing the idea.
Since in some cases development costs can be very high they are the arena where freeriding starts and in which communities come out with very interesting solutions to their problems of information.
If we take the individual as a unit of analysis then it became clear that for some individuals it is easier to rely on somebody else to do the job of developing a project than actually do it themselves. This is not to deny that people do have some joy in participating. We agree that the process itself can be very exiting for individuals. However, when they have to continuously participate, as is the case of self-reliant communities, for some individuals the activity may loose its enchantment and become a burden. If the decision making process starts becoming more and more complicated, as it tends to do, for the actual type of projects increase in complexity and/or because more conflicting interests develop, then it is very likely that some individuals will try to free ride and leave others the job of thinking issues such as "how many rooms the school will have".
When we asked other participants why they had not contributed to develop the idea they commented :
"we knew that he would come out with a good idea, he always do. That is his job as representante [representative] of the village: to have ideas. Our work is to help; all of us, to built them up.... and of course to take care that he does not do everything for himself only.."
It is clear that not all the members of the community faced the same development costs. For those more educated the costs where lower and many of them got more satisfaction in getting involved for they felt they could contribute in a useful and credible manner. This was also the case for members with less economic problems for whom the relative opportunity costs of developing ideas were smaller. In these our observations coincide with those of Frideres (1992: 200) and Bacow (1980).
It has been suggested that the "problem of aggregating time and place information is frequently more difficult than that of dispersing scientific knowledge" (Ostrom, 1993:53). The process of gathering or aggregating information, i.e., to bring together the information the community already has, also implies a series of costs for participatory decision making. An informant that had to develop the idea of the dike almost by himself added:
".... after having done all the thinking.... I still had to go and visit every single household to see if they liked the idea and if they were keen to come and work for it...."
This comment was not isolated. Individuals, that for a reason or another had taken the initiative of putting forwards a project, almost systematically reported on how they had to take the costs of developing ideas and aggregating information by themselves. This is common place in most organisations. However in the communities studied, as in most rural ones, where households are very scattered and isolated(6), it may take days just to make sure that everybody knows the date of a meeting. Making thus, the process of gathering and aggregating information costly.
In the communities studied development and gathering information costs were indeed high. In cases like this it is possible that tree different scenarios may develop, (a) nobody wanted to bear the burden of gathering and aggregating information and develop ideas so as to promote a project; (b) there were some benefits that some individuals derived by taking the initiative; (c) somebody was paid to do the job.
The first scenario was more or less evident in C2. There the role of leader was something no-one wanted. Leaders are voluntaries and receive little benefits themselves by doing the job. The current leader told us once,
"it is more expensive to imagine and organise things for the provecho [benefit/prosperity] of all than to do nothing. You have to please everybody, spend hours thinking and going to the city. Finally people co-operate randomly, things do not develop as you would have imagine and at the end of the day some will even say that you made some money out of doing this" .
The fact that in situations of impasse nobody wants to take the initiative to promote co-operation has also been founded in communities studied in Norway (Oska,1993) and is indeed a common known topic in management of organisations and organisational culture .
The second scenario is the development of alternative mechanisms of reward to those taking the initiative. When individuals perceive that some tangible or intangible benefits can be derived from the hazel of developing an idea and aggregating information they may engage in it in so far as benefits exceed the costs. In the communities observed, particularly in C1 and C3, there were mechanisms that served as counteracting institutions helping communities to sustain participation. This we will discuss later.
In the communities studied information related costs, nevertheless, did not finish with development and aggregation costs. We observed that new obstacles were still present in the process of provide for themselves.
Incomplete information costs refer here to those series of costs that result from the fact that individuals do not have perfect foresight. In service provision, as indeed in any other transaction, many problems become evident ex-post, i.e., only once the actual service is operating. In the communities studied there were severe costs people had to pay once they realised that some of the services they had produced were having problems. Had they known about them they could have solved from the beginning. Though, at the time of designing and building the service they thought they fully knew what they were doing, when the service was finished and they were facing its shortfalls, they could realise, however, that they have been unable to fully predict and evaluate, beforehand, the problems the services were having now.
People many times lacked a series of important elements needed in making decisions on the services they had to provide for themselves. But precisely because they did not know they lacked the information, they were only capable of realising it once the service was actually built. This point started to become clear from our observations of the second year, and it was repeatedly stated by the people themselves.
In many of our interviews with local people they complained about the lack of information they had originally had and how this affected the ultimate performance of the service. An informant from C2, the charismatic informal leader of the village, said about the school the have built through collective action, "we built the school as God made us understand... (which is a say in Mexico meaning "we did not know how to do it so we did what we could").When the facilities of the school collapsed and literally fell down he added:
"... thanks God there were not children in the loo at the moment... We did what we can -you know- but we did not have the plans of construction ...we had la voluntad [the will].. but we did not have plans...".
This informant was not the only one acknowledging this. The school had many problems, most people in the community commented on. The most serious was a terrible humidity problem the two-years old school was already having. The problem was so serious that was already affecting the children's health and some parents were reluctant to send their children to the school.
A very similar case took place in C1 where the community very enthusiastically and committed built a two-classrooms primary school to realise, at its conclusion that the rooms were too small and, as in C2, incredible cold during the winter. The school was so badly built that the community was having problems for it to be recognised as a school by the regional education bureau. In our interviews the people that participated in its construction were complaining about the little information they had on the requirements of a school.
The most striking thing is that in both cases, in C2 and in C1, most of the participants that contributed to the construction of the schools were themselves masons in the neighbouring cities. In a focus group meeting we held in C1, in which they were faced with this apparent lake of coherence, one of them stood up and said
"even to do a school has its own science - you know-.... None of us had built a school before... how were we going to know that there were specific requirements to meet.... But now that we built it we can see that the classrooms are too small for putting tables for all students and that it is so cold that the children are getting sick all the time."
What these examples show are evidently ex-post costs of incomplete information. C2 and C1 show that the process of designing and building up a school is not as easy as it could be initially supposed. Although these communities had the relevant data on how many children were going to attend the school, where the school was most convenient for most people in the community, and so on, they lacked the basic technical knowledge that even the construction of a two-tiers school implies if it is expected to be an efficient and sustainable infrastructure.
These cases show that communities know best but do not know everything. They may know best what is needed but often not how it could best provided. When providing for themselves , people indeed have relevant time and place information but they face serious gaps in terms of technical knowledge. Even when these communities had solved their development and aggregation of information costs they still could not fully know if the expertise, i.e., information, they had within the community was indeed effective in terms of cost- benefit analysis and in terms of efficiency. The important point to note is that these problems could have been easily solved before hand if the adequate information had been available.
Expost- incomplete information costs are not externalities but ex-post costs that should be attached to the service for they are intrinsically related with its performance. Nevertheless, these costs are difficult to predict for communities by themselves for this imply certain level of knowledge and expertise.
The cases presented above show that both local knowledge but also technical expertise is needed if any effort to build rural infrastructure for service provision is expected to be efficient, effective and sustainable. The people that participated in building the schools in C1 and C2 spend a good amount of time building their schools. People in C1 and in C2 were so disillusioned afterwards that did not want to get involved in the actual maintenance of the school.
From our interviews people constantly stressed how they would have avoided information problems if the government or the NGOs would have helped them "as they used to".
Most radical tendencies of participatory development would argue that ex-post incomplete information costs are important for communities can "learn" from them. They would say that people in C2 and in C1 have learned from this experience and for the next time they will do things better. In terms of information this argument is twofold. On one hand it may imply that communities will have to pass through a succession of trials and errors before they accumulate all the relevant information and expertise needed to built a proper school. This argument is evidently pointless and surely no-one would subscribe to it, for communities will only built a school once. The other side of the argument is that next time that people engage in the production of a service they will try to find out the relevant information they need so as to be more sure that this time they are building an adequate facility. They suppose that for the next time people will do more R&D and will learn to better search the necessary information ex-ante .
This assumption is true to an extent, for communities and individuals do learn, and as we observed people in C2 and C1 were indeed more conscious about the need to search for information after they have observed their own failures. However, the argument fails in realising that (a) different services would need different kind of previous information (sometimes radically different in nature and type. Thus having realised that relevant information is needed ex-ante, does not guarantee that they will have access to it); and (b) if the costs people have to incur, when searching for information, outside the community are greater than the benefits they expect to derive from that information, they will not search for it. The following section develops on this problem.
Because communities have incomplete information, when individuals are to provide for themselves, they have to search for data, on issues such as technical specifications or on requirements of a service, outside the boundaries of the community. This process of searching for information implies a series of hidden costs for the people. These we have called costs of searching for information .
These costs are paramount in assessing why and how individuals respond to participation. Nevertheless, policy planners, and most theorists working with participatory development issues have practically never commented on them.
Take again an example from C1. The community had agreed to designate a piece of land for the construction of a fish tank. In the meeting where the idea was approved, somebody suggested approaching the Fisheries Department, but the idea was ruled out. The following testimony, we recorded in a meeting, explains why they rejected the idea and shows how people perceive the costs attached to the process of searching for information:
" ..we decided not to approach the Fisheries department at the beginning ....because at the time nobody had the time nor the money to go to the capital city... We could not afford to go from office to office investigating where the department was.... just to find out that at the end of the day it was closed..... You can not go earlier because there are not buses from here to there... even if you leave here at six in the morning, you get to Toluca [the capital city] by ten.... it takes you another hour to reach the regional government central offices - that is eleven- ... You still have to find where the office you are looking for is...Then you have to wait...Then if the secretaries treat you as a human being (because there are some that have a character of monsters)... they tell you where it is.... And for a reason that I can not understand it is never nearby.... You have then to go to a totally different place in the city if not yet to another one..... For that time the working day -because bureaucrats only work until mid-afternoon, -you know- is gone. So it took you -if you are lucky- one day to find the address of the office you are looking for and then you have to go another day just to make an appointment.... The problems are still the same because you do not know where the place is and it takes again ages to find it... Once you make the appointment you come back home... Then you have to spend yet another day -and a day's salary- to go back on the appointed date...If you are lucky then you get what you were looking for. But sometimes you just find that in that office they can not help you, or even worst that what the secretary told you was wrong and that in that office they do not actually do what she said!....it is crazy, isn't it?....That is why we, in our meeting, decided to avoid all these problems and just approach the Fisheries Department once, at the very end, when the tank would be finished.... to ask for the fish, this way we would only would have the pain, and the expenses once... Though it was at the end more expensive for us...."
Thus, once they decided not to
approach the department until the completing of the fish tank
, the community very expeditiously and enthusiastically started
to dig. They dig out approximately three thousand cubic meters
and filled the space with water. Then they approached the Fisheries
department. They got support from them and a large supply of fish
eggs they could seed in their tank. However, when an expert from
the Fisheries department came to the community he found that the
place was not the most suitable one. He stressed that there were
problems with the type of soil and with the neighbouring fields,
that by using fertilisers could seriously pollute the water and
therefore the fish. The community ignored the expert's recommendations
and sowed the eggs they had already been given.
Their reaction was understandable for many of them had lost a
week's worth salary, four of them even lost their job, and thus
they were not keen in listening to somebody telling them that
it all had been for nothing. After three months some people were
still fishing but the leakage, resulting from an inappropriate
soil, had reduced so drastically the level of water that the population
of fish could not reach the required levels to provide for the
community. Now the tank has become a big bog area children use
to play.
The cases here presented show that it is misleading to suppose that existing local knowledge is enough for sustainable self-reliant development. To increase the capacity of rural communities to access relevant information is core if self-reliant participatory development is to be expected to work.
Until now we have been discussing the problems related with the fact that in rural communities information on how to provide is incomplete. We presented how our communities were facing obstacles in terms of developing ideas and aggregating information. We also argued how sometimes community only realise that they had incomplete information when the service they produced fails. Finally we discussed the problems the communities studied have when searching for the information they lack outside the boundaries of the community. All these costs we presented as caused by incomplete information. However, the communities studied here were still facing another set of information costs caused by the way in which information was distributed within the community. These costs we discuss in the next section.
While the development costs, gathering and aggregating information costs and costs of incomplete information, we discussed before, arise from the relation of the community to information in the external environment, there are a series of costs that are more internal. These we refer here as `differentials in information costs'. These cost are a direct consequence of the fact that information is not evenly distributed within a community.
Because rural communities are not homogeneous, but aggregates of individuals with different interests and different life expectations, the time and place information they have is not the same. This means, as we develop here, that there is not a local knowledge. Individuals in rural communities, as the reported here, have different informations, or in other words, there are differentials in the information individuals have at the interior of a community.
Because the rural poor compete between themselves for resources, they used the differentials of information they have to maximise their benefits and minimise their costs.
In participatory decision making differentials in information can make that some individuals can use the information they have strategically. In the communities studied this strategic use of information was causing two types of costs to decision makers (a) costs caused by dissimilarities in the information they had, and (b) costs caused by asymmetric information. These we discuss now.
Dissimilar information costs are the result that a community is not a unity of interests.
Because of different occupation, kinship, religions an other factors, different groups of individuals have different types of information. As the information they have is related with their activities, so are their interests. Moreover, a large part of the needs they have are a direct consequence of the activities they are involved in. Needs, activities and information, are mutually reinforcing factors that determine individuals interests and, therefore, their choices.
For service provision this means that individuals will choose those services, they perceive they need in relation of what they do, but also on what they know about. It also means that some individuals with more relevant information will be better positioned for putting their point across and therefore will be able to lead the community.
In order to better explain what are dissimilar information costs we will discuss why in the communities studied the rural poor have different information, after which we will argue that differentials of information creates costs for participatory service provision.
In the region studied diversification of livelihood strategies and interests has created a multidimensional and culturally complex environment , in which, as Johnson puts it, people's responses to their material conditions and to the effects of change are also multidimensional, and reflect the complexities of cultural values and different aspects of rural life (Johnson, 1992). Thus, individuals , even within the same community, were subject to a considerable variety of differing institutional connections (19), that were the result of the different livelihood strategies they have engaged in, and of the different fields of relation they had created (20). These differences were cause and effect of individuals having different information and different needs.
Moreover, different information brought people to acquire different mental maps (North,1996), that created differences in the subjective consciousness and in their understanding of their constraints and possibilities. This, reinforced by the way different groups of poor experience their poverty, shapes their interests differently, and explains why, when individuals within a community engage in collective action they exhibit so different patterns of attitudes and motivations.
Dissimilar information costs arise from the simple fact that different individuals have different information-interests-needs when they sit to make a decision on what service to provide for themselves. These costs do not refer only to the costs individuals have to pay in terms of time and effort to understand the information others have. More importantly, they refer also to the different relative value that a specific kind of information may acquire in an specific situation. Take, for instance, the case of two friends travelling together through France and Italy. One speaks Italian but not French and the other French but not Italian. The information each of them have -the knowledge of the language- will have different relative value depending on which country they are. Each of them have different dissimilar information costs depending on the country they are at in a specific moment. Dissimilar information costs are similar to asymmetric information for both form part of, what we have called here, problems of differentials in information. They are, however, different for dissimilar information is structural, and do not imply guile. Different individuals have different information regarding the many different events that conform their lives. This is structural. Asymmetric information is also related to the differentials in size ( quantity or value) of information, but it is related to the same event, i.e., who holds more information about a particular situation. The information our friend that speaks French has -the knowledge of the language- serves mostly in France, i.e., he has asset specificity with value dependent on being in France, and loses it in the moment he cross the Italian border. At the very moment of crossing our Italian-speaking friend will have more relevant information in Italy and therefore will be in a better position to make acquaintances, listen the radio and order food. He/she can then have more control over the situation. While our French-speaking friend will have to incur in some costs, in terms of time and effort so as to do the same. He/she may then be in a relation of dependence to the other.
If our Italian-speaking friend starts behaving opportunistically, taking advantage of his/her knowledge of the language in a way that may impact our French-speaking one, then we will be talking that the latter is paying asymmetric information costs.
In the communities of this study, dissimilar information in terms of language represented indeed costs for those whose Spanish was not good enough. In community meetings it was immediately clear that those that remained silent were, in general, those whose command of Spanish was poorer. But also those that lacked other types of information, such as knowledge on city-life, urban manners, and even names of government's offices. These types of information were assets for some and represented costs for others. Those for which information was a cost had to put themselves under a relation of dependence with those for whom information was an asset.
Dissimilar information costs are also the costs attached to the process of the reproduction of information. For within a community different members bear different costs of access and of reproduction of the information they have. In our communities it was evident that those with a proper command of Spanish had less problems understanding a new proposal that those that did not. Those that were already streetwise were more able to contact bureaucrats and donors. They had less costs. They were, therefore, systematically in control over other individuals with higher costs. The latter had to confiar y cobijarse [trust and cover] -as they told us-, putting themselves "under the umbrella" of those for whom the command of Spanish, for instance, was an asset.
In this line of ideas some authors have also identified problems related with what we refer here as dissimilar information costs. Analysing how individuals exert their voice or not, Frideres suggests that in processes of participation there exists a self-selection process at the community level in which the less educated choose to remain silent. He observed that large segments of communities auto-segregate themselves and remain outside the assessment process. This autosegration is for Frediers not always a result of conflict or class distinction, but often a matter of personal choice (Frideres,1992:199). In the communities studied individuals make the choice of being silent for they have not previous information that allows them to participate, and the dissimilar information costs they would have to incur so as to be able to participate were higher than the benefits (21).
Until now we have been discussing that our communities were facing a series of problems to develop, aggregate and access information that seriously limited their capacity to provide for themselves. We also argued that in a participatory decision making process communities do not act as a unity of interests. We have analysed how information is a crucial element in decision-making process, and that those with access to the relevant information will be more capable of putting forward their points and manipulate collective action towards their own interests.
It is important to note that while dissimilar information costs focus on the individual stock of information and experiences, we do not pretend to say that individuals in the rural communities of our study are totally individualistic actors. On the contrary, they are part of strong and complex networks of reciprocities and alliances in which rural life is structured. Individuals do perceive and respond to their environment differently, but their responses are also by group and related to factors such as kinship, occupation and religion. As we will develop in the next section of this paper.
Information by its very nature is unevenly distributed, and the communities studied here are not an exception.
Following the arguments presented in the last section here we present evidence on how, for services have different impact in different groups of individuals, when this individuals are confronted with the possibility of choosing what to produce different interests spring up. In our three cases of study individuals associated with other similar so as to reorganise the information they needed to put forwards their interests. Groups of interest became then pools where the information of a particular group was stored. We explain here how these groups hid and used information in an opportunistic manner so as to maximise their benefits and minimise their costs, and how this created another type of costs, asymmetric information costs.
Asymmetric information classic example is that of the quality of an second hand automobile, in which the buyer does not know if he is buying a "peach", i.e., a good performer, or a "lemon", i.e. a bad performer (Akerlof, 1970). The seller has certain information on the state of the car that the buyer can not access unless the former disclose it. However, the seller has little incentives to do so for this could mean a weaker position in the negotiation of the price. In terms of participatory decision making, this means that there are sellers of information , i.e., what and how to provide (those having information on how to contact NGOs or government agencies, those with communication skills or that know how to read, for instance) and buyers of it (those for which information is a cost). Individuals who sell are those who possess relevant information which being underprovided becomes a valuable asset, as we described in the previous section. For communities providing for themselves Akerlof's "information paradox" means that the seller may not be willing to make public his information on how to provide an specific service because of fears that it will be underpaid ( as information is almost anywhere) and the buyer may not be willing to buy for fear to buy a lemon. In other words, because the market for information on what to provide is full of imperfections and because the rural poor are competing for resources people that have relevant information may only bring it to market if they perceive that it will be fairly "paid", i.e. that they will receive a fare share in the benefits. The buyers, the rest of the community, will only buy that information (a) if they can trust that the sellers are not cheating or will capture of the benefits of a projects for themselves; and (b) if they perceive that the information the sellers have is indeed relevant for the production of the service they are aiming to develop.
Asymmetries in information have been highlighted as a door to opportunistic behaviour. When one party to a contract knows something about the contract the other does not, is likely that he/she will use it to maximise his/her own benefit.
In particular asymmetric information tends to manifest itself in those goods in which "essential quality attributes... are difficult to measure without investing substantial amounts of time and other resources..." (Ostrom, 1993:55).The point to be realised is that when there is asymmetric information various adverse selection and moral hazard problems arise. Guarding against these will substantially increase the costs of transaction. And more importantly that, as Ostrom puts it:
"at the minimum, these increased costs can be expected to reduce the volume of beneficial trades or productive activities. In the worst case, when no counteracting institutions have been devised, information asymmetries can eliminate some types of mutually productive activity entirely" (Ostrom,1993:55).
In terms of participatory service provision this means that the most the sellers will perceive that their benefits of a service will be minimal and the buyers wont believe that sellers' information is valuable and/or their behaviour will be honest, then the outcome will be closer to lack of co-operation and the other way around. In the communities reported by this paper asymmetric information was exerted not by single individuals but by groups of interest. This, the political economy of information in rural communities, we will develop in a paper to follow.
In this paper we have discussed the various real-world information problems, which rural people have to deal with when they intend to act collectively.
Literature has identified some costs associated with collective decision making. These costs are generally related with the organisational problems individuals face when participating. These are costs common to any process of collective decision making, such as being time consuming; the need for communication skills; and the different world-visions that may diverge on what and how things should be done. However, little attention has been put onto these costs and we do not know of any systematic and/or organised study of them.
In this paper we have tried to go deeper in the analysis of the costs of collective action for service provision. We focus in the analysis of rural community's efforts for the provision of collective goods. By so doing we were able to present a another set of information-related costs that impact decision making in rural development. We believe that these costs are particularly important for their presence or absence drastically conditions community development.
These costs were divided into `incomplete information' and `differentials in information' costs. The `incomplete information' costs of participatory decision making are a consequence of the difficulties participants face when having to search and organise information so as to produce a service.
In the communities reported by this study we could identify a set of costs within `incomplete information costs', namely, development costs, aggregating information costs, ex-post incomplete information costs, and the costs of searching for information.
Another type of information costs can be related to the differentials in information between individuals in the community. What we called here `differentials in information costs' were broken down into dissimilar information and asymmetric information costs. Dissimilar information costs arise due to the fact that at the interior of rural communities there are a multiplicity of activities, needs and interests. As a consequence, the levels and types of information different individuals have vary dramatically. Because the management of information is fundamental for individuals to participate in decision making these differentials of information are particularly important to determine who participates and how, and who does not.
Asymmetric information costs arise from the fact that the rural poor studied were competing between themselves for resources and were ready to use information opportunistically, to maximise their benefits.
For the rural poor it is important to know, for instance, when cheap medicines or food will arrive, where there are jobs on offer, and so on. Because they live in an environment of particularly scarce resources, they compete between themselves to be the first to get information on these issues. The study of the information costs they face become then a extremely relevant issue in development studies.
We believe this paper sets a basic typology of the most common information costs the poor face in rural settings. It does not pretend to be exhaustive , for some other costs may be found in different studies and contexts. However, we believe that the study of information costs of this type may be also applied to other type of organisations and structures of exchange. By so doing, important insights on institutional arrangements can be brought to light improving then our understanding of organisations, institutions and other bodies of governance.
1.- See Oakley P. and Marsden D., 1984, Approaches to participation in rural development, International Labour Organization,p.1.
2.- Mores are here understood as cultural units.
3.- See H. Johnson in Bernstein, H., Crow B. and Johnson H.. eds. (1992) Rural Livelihoods. Crises and Responses, Introduction. Oxford: Oxford University Press,/ The Open University.
4- These types of information have been identified as time and place information and scientific information (Ostrom,1993); local knowledge and expertise (Brett, 1996) , traditional and technological knowledge, etc.
5.- It is important to note that Incomplete information in itself is not a transaction cost. For in so far you do not transact the fact of having incomplete information is not costly.
6.- See Hapgood's (1965:6) comment on how the fact that rural decision makers are widely scattered geographically is one of the problems for collective decision-making.
7.- The fallacies of exclusively rely on local knowledge and the need to bring together experts knowledge with the local one has been stressed by Brett, 1996 and Gardner and Lewis 1996.
8.- Berstein argues that for Latin America diversification has been the result of economic recessions of the 1980s and 1990s. In the communities studied this phenomenon occurs historically and to a large extent is due to the fact that traditionally they have had strong links with the capital cities to which they serve with eventual cheap labour force.
9.- Berstein stresses that "semiproletarianization" is a structural rather than transitional or temporary condition. Many political economists argue that the extent and continuity of semiproletarianization expresses a specific feature of capitalism in the third World". For him "it seems misguided to try to decide whether rural semi-proletarianians in general are really farmers (or 'peasants') who also work for others, or really workers who supplement insecure and adequate wages with farming and other 'own account' activities. According to their circumstances, different groups of rural people at different rimes might be closer to the former or the latter"
10.- It is interesting to note that changes in the demand not only affect the size of it, rural people has to be very aware of its variations in time -for different seasons may have different needs of labour force location and type. They have also to be clear about its changes in terms of real wages.
11.- Seasonal migration in these communities occurs in weekly terms and mainly to Mexico city.
12.- Social differentiation has been defined as social relations of systematic inequality along lines of class, gender and other divisions (e.g., ethnic or cultural) and the processes through which these social divisions and relations are created. (See Bernstein, H., Crow B. and Johnson H.. eds., 1992)
13.- There were certainly problems of inequality in terms of gender, that affected the different costs women face for participate.
14.- In the C2 case, Pancho an information broker, could dedicate himself to plants growing because he was the owner of land and had the skills, while Odilon presented problems because he was landless and unskilled.
15.- Following the criteria of their ability to accumulate Berstein has classified peasants in (a) Middle, those able to meet the demands of simple reproduction; (b) Poor, those subject to simple reproduction 'squeeze' on their capital or labour or both; and (c) Rich, those able to engage in expanded reproduction. (See Bernstein, H.,Crow B. and Johnson H.. eds., 1992)
16.- Chambers establishes an interesting analysis on how different poor people experience poverty in different way. He distinguishes, for instance, between the poor and the ultrapoor, and understand that they have different needs and behaviour. A second issue is "ascribed deprivation" (certain categories of people are more likely to be poor (and poorer) according to ascribed characteristics ) A third specification of the poor is by their spatial location- particular regions, rural localities, or types of villages are poorer that others. A fourth distinction Chambers finds are livelihood strategies.
17.-Using the metaphor of "foxes" and "hedgehogs" from the Greek proverb that the "fox knows many things but the hedgehog one big thing". The "foxes" build a repertoire of different petty enterprises and activities, i.e., diversification. "Hedgehogs", on the other hand, are looked into one predominant source of livelihood. We believe that Chamber's distinctions are to a large extent linked to communities' structural conditions. Foxes may be able to be so because they have structurally the conditions that allow them to dedicate themselves to mote "petty enterprises", while "hedgehogs" may be tight to one kind of activity because maybe they lack the land or any other resource for being more entrepreneurial". This was evident in the communities studied area.
18.- P. Oakley states, for instance, that "rural areas are harshly differentiated between those who have and those who do not have access to productive assets, e.g. land. water and credit, and this differentiation is reinforced by the political and social privileges which accompany the ownership of such assets". (Oakley , 1991:197, emphasis added)
19.- For a very similar kind of observations see Hapgood 1965:6.
20.- See Redfield (1956) and Oska (1993).
21 .- This observation is not exclusive to ours. In the 1981 American Association for the Advancement of Science' Symposium participants on risk analysis and social impact assessment agreed that this structural separation was present in nearly all large-scale natural resource projects in which we have been involved.
Akerlof, G.A., (1970), " `The Market for Lemmons': Qualitative Uncertainty and the Market Mechanism", Quarterly Journal of Economics, 84 (Agosto); 488-500
Bailey, F.G., (1971). Gifts and Poison, Oxford: Blackwell.
Banfield, E.C., (1958), The Moral Basis of a Backwards Society, New York and London: Free Press and Collier-Macmillan.
Bernstein, H.,Crow B. and Johnson H.. eds. (1992), "Rural Livelihoods. Crises and Responses". Oxford: Oxford University Press,/ The Open University.
De Janvry, A., Sadouet, E. and Wilcox Young, E., (1989), "Land and Labour in Latin America agriculture from the 1950s to the 1980s", Journal of Peasant Studies, 16(3).
Frideres, j., U. Flesing , S. Goldenberg and J. DiSanto, 1992, " Community Participation : Natural Resource Development in Rural Alberta", in J. S. Frideres (ed.), A World of Communities: Py Research Perspectives, North York, Canada: Caotus University Publications.
Gluckman, M. , (1963), "Gossip and Scandal", Current Anthropology 4:307-16.
Hansmann, H., (1996), The Ownership of Enterprise, Cambridge and London: Belknap Press of Harvard University Press.
Hapgood, D. (Ed.), ( 1965), Policies for Promoting Agricultural Development : Report of a Conference on Productivity and Innovation in the Underdeveloped Countries, Cambridge: M.I.T. Centre for International Studies
Hart, H. , (1971), "The Village and Development Administration" in Heaphey J., (ed.) , Spatial Dimensions of Development Administration, Durham: Duke University Press.
Haviland J.B., (1977), Gossip reputation and knowledge in Zinacantan, Chicago and London: The University of Chicago Press.
Johnson, H., (1992), "Rural Livelihoods:Action from Below", in Bernstein, H.,Crow B. and Johnson H.. eds. (1992) Rural Livelihoods. Crises and Responses. Oxford: Oxford University Press,/ The Open University.
Marsden, D. (1994), "Indigenouos Managemetn and the management of Indigenous Knowledge" in Anthropology of Organisations, Susan Wrigth ed., Routledge, London.
North, D., (1996), "The New Institutional Economics and Third World Development" , in J. Harris, J. Hunter and C.M. Lewis, The New Institutional Economics and Third World Development , London and New York: Routledge.
Ostrom, E. L. Schroeder and S. Wynne, (1993), Institutional Incentives and Sustainable Development, Bolder: Westview Press .
Oska, J, (1993), "The bening encounter: the Great Move and the role of the state in Finnish forests", in Banuri, T. and Apffel, F.,Who Will Save the Forests? Knowledge, Power and Environmental Destruction, United Nations University and World Institute for Development Economics Research, London and New Yersey, : Zed Books.
Paine, .R. (1967), "What is gossip about? An alternative hypothesis", Man (n.s) 2:270-85.
Redfield, R., (1956), Peasant Society and Culture, Chicago: University Press.
Simon, Herbert A., 1961, administrative Behavior, 2nd ed. New York: Macmillan, Original Publication 1947.
Skelcher, C., A. McCabe, and V. Lowndes, (1996), Community Networks in Urban Regeneration", UK: The Policy Press.
Williamson, O., (1985), The Economic Institutions of Capitalism, Firms, Markets Relational Contracting , New York and London: Free Press and Collier Mamillan.