Organisational mechanisms that best serve the poor
Graham Boyd (2005)
(42 pages -
284Kb pdf file)
(As an IIED
This paper seeks to sharpen understanding on how poor and
marginalised groups can address the forces that restrain their self-development
through the creation of their own democratic economic organisations.
Critical factors blocking pro-poor development are examined such as elite
power, modes of living and other dependent-dominant relationships which inhibit
the poor from pursuing organised actions to change their life situation. In
seeking ways of overcoming these factors the paper analyses the need to provide
some form of catalytic support to stimulate the poor to create informal and
formal organisations under their ownership and control.
An examination of ‘official’ development policy that both
explicitly and implicitly seeks to promote investor-controlled enterprise as the
dominant business ownership model suggests that this approach is unlikely to
bring lasting changes which will directly benefit the poor. “Because well
functioning markets are designed to bypass such people.” (Sachs, 2005)
Market interventions by pro-poor development partners need to become more
balanced. In particular they need to promote and support on an equal basis
appropriate forms of member-controlled enterprise. It is through this
self-organising approach that the poor obtain significant power to control their
asset-base, promote economic democracy and retain economic surpluses.
The paper details a range of different forms – association,
trust, partnership, company and cooperative - which can be used to
achieve these objectives. Two charts provide details of key features such as
legal incorporation, governing instruments, ownership, regulation, asset and
financial controls, meetings, management structures and winding-up. Guidance is
provided as to which legal forms, if any, would be most appropriate to ensure
that self-organised enterprises remain controlled by the poor and therefore best
serve their interests.