Agricultural Public Services Delivered by Chilean Municipalities: a Free-Market approach?

1. Agricultural Public Services Delivered by Chilean Municipalities: a Free-Market approach? Paul Lewin

2. Content • Background • Agricultural Public Services in Chile • What Motivates the Chilean Municipal Government? • Why some Municipalities are able to produce higher-quality services? • Conclusion

3. Background • Public services production based on: • Demand: • Needs of citizens (preferences) • Supply: • Prioritization of public goods • Taxation • Economies of scale • Consistency between Demand & Supply • Decentralized governance structure

4. Agricultural Public Services in Chile • Chile is a unitary political system. • Public funds are arranged through market instrument. • Funding is decided upon by central government. • Municipalities don’t have Legal obligation Specific budget support to supply agricultural services • Law doesn’t compel Agricultural Agencies to coordinate their activities with the municipality

5. Chilean Municipalities Responsibilities • They are quite broad and most of them are shared with other public entities. • Sports and recreation • Social welfare • Support low-income sectors • Allocation of monetary subsidies to poor families • Public housing • Education • Health

6. Therefore,… • Any action performed by the municipalities to deliver agricultural services is voluntary and must be self-funded. • Questions: • Why local politicians invest their scarce resources into these programs? • Why some municipalities are able to produce higher-quality services?

7. What motivate the Chilean Municipal Governments? • Existence of a central Government Commitment • Communication between Municipality and Central Government • Existence of Financial Gains • Raise funds from agricultural sector • Existence of Specific Stakeholder Groups • Producer organizations • Higher number of landowners

8. Why some Municipalities are able to produce higher-quality services? • Popular participation in public decision-making processes • Bridging the information gap between government and civil society; • Creating alternative channels for the delivery of public services; and • Preventing the development of perverse incentives in government • Viable institution for the transfer of information among local actors • Incorporate the local knowledge • Take into account the particularities of each locality

9. Conclusion • Municipal performance is related with local institutional arrangements • Local governments represent a potential for rural development • Municipalities might act as intermediaries between local farmers and central government. • Current knowledge in Chile about consensus-building mechanisms at local level need research

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