27
Role ofOPCs in a Market Economy It is increasingly evident that a new concept of economic and social development has been emerging in Latin America—a concept that consists of action from the bottom up and direct popular participation. This is also true in Chile, which has launched a model of equitable economic growth coupled with efficient resource allocation based on market decisions (MIDEPLAN, 1990). Under this scheme, public activity within the economy does not involve direct intervention in the markets. The state concentrates its activities on three types of specific action: • • •
Regulatory measures in markets affected by monopolies, externalities, and provision of public goods. Allocation of domestic funds to meet social goals to redistribute income among the poor and improve their quality of life. Adequate budget safeguards to ensure that the proposed goals of macroeconomic stability are met; that is, defining a public sector budget compatible with growth, inflation, employment, and income redistribution.
This type of social development involves decentralization of social policy to incorporate the initiatives of the various public and private entities that mobilize and deliver social services. In close cooperation with the very people affected by social policies (the most disadvantaged), these organizations work toward the achievement of social objectives, competing among themselves for the financing allocated for these purposes. Targeting the poor in social programs and employing market criteria in the allocation of the funding established for these ends are transforming social policy. OPCs play a critical role in this scheme. They are the only organizations that can coordinate, support, and encourage the poor to seek solutions to their basic social and economic problems and, at the same time, secure the necessary economic means to enable these solutions to become reality. OPCs are thus becoming institutions for social intermediation because they are able to articulate the demands of those whose basic needs are unsatisfied and place those needs on the market in the form of social programs to be financed. They also receive financing for the realization of social programs—funds deriving from domestic budget allocations, international financial institutions, and private donors. For OPCs to establish themselves as intermediary agencies for social programs, they must capitalize on their greater knowledge of the people with whom they work and their specialization in the social services that they provide. To accomplish this they must:
Copyright © by the Inter-American Development Bank. All rights reserved. For more information visit our website: www.iadb.org/pub
THE ROLE OF COMMUNITY ORGANIZATIONS IN CHILE