Alternative development and the role of the local community: a new paradigm of social and economic development of Croatia

This month, Croatia is marking twenty years of the first free, multiparty democratic election and the constitution of a democratically elected parliament. This historic cesure also meant a transformation of the economy and social organization and development. This year, Croatia is expecting to finish the EU accession negotiation process in order to be able to join the Union in 2012. Therefore, this month’s report deals with development models and their role for Croatia’s social and economic progress, with a special emphasis on the local community.

Introduction

To reflect upon the future of a country such as Croatia, is an extremely complex task because we are talking about a society torn between past and present, between desire and ability, ignorance and ambition, between the desire to become a recognizable entity on the global level and narrow-minded local political disputes.
It is an ungrateful task, because it presupposes a complete change of the development paradigm, i.e. most of the premises on which development was based until now. Firstly, this task requires a review of the role of the state and its correlation with numerous aspects of social and economic development. Secondly, it requires a revision of the role of both the society and the individual in this process. Therefore, this review, although largely focused on reflection upon the future social and economic development of the Croatian society, is grounded not only in the arena of social welfare and economy but also in the arena of ethics, the arena of technology and society, the arena of science and education and the arena of the legal system. This is in the very nature of development as a multidimensional process involving major changes in social structures, attitudes of people and state institutions, as well as acceleration of the economic growth, reduction of inequality and poverty elimination. It is a process of change in all spheres of life and thus requires a broad working front of all development actors.

Without the illusion that this article will solve all the dilemmas which bothers the Croatian society and offer a complete solution to development problems, our goal was to give a different vision of Croatia's future. This vision puts the responsibility for future development decisions and effects on all adult citizens of this country, eliminating our eternal division between the "ones up there" who make the decisions and "those down there" who usually have no say and exercise no effect on those decisions. In this context, we advocate the introduction of a new development paradigm, the so-called alternative development, which will puts the focus of the entire development process on the local community and its members as key stakeholders of development.

The concept of alternative development

The numerous development theories, which evolved from simple growth theory to the holistic theories of social change, are summarized/categorized by academics in 4 concepts: the concept of modernization, the concept of dependency, the concept of economic neoliberalism and the concept of alternative development (and more recently the concept neodevelopmentalism, as a variation of previous versions of the development paradigm). Ever since the early 1950s, these concepts and theories upon which they are grounded, have been trying to provide answers to the following questions: what is development, what are its factors and assumption, how do we encourage it, what is the role of developed countries in promoting development in developing countries and what is the position of different stakeholders in this process. What is, in fact, common to all theoretical concepts up until the appearance of the concept of alternative development, is a sort of defense of the thesis of the necessity of unequal positions of developed and underdeveloped countries or regions, the causes for this being found in either partial cultural, demographic, political and historical circumstances or economic development or in a combination of these causes. The only concept of alternative development, whose origins we can trace back to early 1980s, as a sort of criticism of the previous development concepts, puts the focus of interest on the content of the development, rather than the form. Its basic features are:

• development must be oriented towards the needs, i.e. meeting of the material and immaterial needs;
• is endogenous, i.e. its is derived from the essence of every society, which is defined by the sovereignty of its values and the vision its future;
• it puts trust in itself, i.e. every society must rely primarily on its own resources, the energy of its members and its natural and cultural environment;
• it is environmentally acceptable, which means a rational usage of resources of the biosphere with full awareness of the potential of local ecosystems, as well as global and local constraints imposed on current and future generations;
• it is based on participation in management and decision-making of all those affected (see Sofield, 2003).

From the things mentioned above follows a logical conclusion that this new development concept requires the governments, which were the most responsible subjects of development in the past, to give up parts of their responsibilities and authorities and share them with development actors at lower levels, especially at the local level (Petrić, 2007). This of course does not imply a transfer of development decisions to purely market criteria, because the classical concept of economic neoliberalism had proved its unsustainability by taking the world into an unprecedented crisis in the 1930s. This new concept reflects upon the development of common "work" of public and private entities, as well as non-governmental organizations and the local community, i.e. the population on which development rests. It is obvious that this is a very complex approach to development, which not only seeks to revise the role of the state, but also questions the ability and willingness of local communities to take responsibility in managing their own development and future.

The empowering of local communities to manage development

The basic concept of the term "empowerment" lies in the concept of "power". "To empower" means to give someone power - the ability to decide. 'Empowerment', therefore, at the same time represents a process (empowerment), but the result of the process - outcome (competence, the state of being empowered). The concept of power is opposed by the concept of weakness / lack of rights (powerlessness). Those who do not have the power are marginalized and disenfranchised.

The term "empowerment" entered the general lexicon as a term describing the ability of individuals or groups to make decisions about their own work/interests and manage them. According to Simmons and Parsons (cited after Sofield, 2003) "empowerment" is a process that enables people to master their own environment and achieve self-determination on the basis of individual or interpersonal changes or changes in social structures that affect the lives and behavior of individuals.

The term "empowerment" was first used in social sciences and humanities such as sociology, anthropology, ethnology, and others, in the context of strengthening the role of women, marginalized people or an ethnic/racial group, but later its usage was extended to companies and social organizations. For example, the literature on corporate governance deals with different concepts of decision-making in order to control the behavior of businesses and employees. We are talking about the so-called top-down and bottom-up concept. The first one assumes the flow of information from top management to workers who are excluded from decision-making process. The second approach advocates the dissemination of all information to employees at all levels, providing them with timely information and participation in decision-making, which ultimately results in higher satisfaction in the workplace and greater satisfaction of end consumers goods or services supplied the respective company.

When we consider this in the context of the development of the local community, we are dealing with notions of self-management, participation, networking and equality.

Previous concepts, especially participation in the decision-making process, i.e. participation, are essential elements of the concept of "empowerment" because they make people more self-confident, strengthen their confidence,allow wider knowledge and enable development of new skills.

Empowerment of local communities is a process, whose positive results are visible not only in the economic area (in terms of improving the overall development, especially economic impacts, the rise in the level of engagement in the community, the financial impact on individuals and the community), but also in the psychological (increased confidence of different stakeholders of development), social (growth of balance and connectedness in the local community, the emergence of new initiatives, etc.) and political areas (political structure of the community becomes the representative forum where people can ask questions and discuss problems related to development initiatives, the decision-making process involves different stakeholders).

The level of empowerment, i.e. the involvement of local communities in decision-making processes and management will depend on the so-called development of social capital.

Many authors have dealt with the theory of social capital, notably James Coleman, Robert Putnam and Pierre Bourdieu. Robert Putnam explored in his book Making Democracy Work (1993) the reforms that were implemented by the Italian state in the 1970s and 1980s and compared the causes of developmental success of these reforms in the Italian north and south. In these studies, he concluded that the developmental success of reforms in the northern provinces of Italy lied in the fact that in these areas there was a well-developed civil society that was based on cooperation, networking and participation in decision-making processes at all levels. On the other hand, southern Italy is characterized by strict hierarchical / vertical relationships that have exercised a powerful influence on the behavior of all social groups and individuals that influenced the failure of reforms.

Coleman's (1988, 1990, 1992) interpretation of the concept of social capital is the one most cited in the scientific community. In his view, social capital is created in the structure of relations between individuals and is therefore intangible. Its potential is, however, realized through the ability (as well as in physical capital and production funds and human capital- work force) to facilitate manufacturing activities, which can be achieved by creating social relations that are built over time and that allow individuals to better achieve their own interests. Coleman thereby defines four important forms of social capital: a) the obligations and expectations (e.g. doing service to others and getting service in return), b) information resources (e.g. sharing of useful information that may help some future action), c) norms and effective sanctions (e.g. establishment of common values and standards within the community) and d) relations with the authorities (e.g. skilled and successful managers who share information with other community members).

In his essay The Forms of Capital Pierre Bourdieu (1983: 249) defines social capital as an aggregate of actual or potential resources which are related to the existence of a continuous network, which may be based on more or less institutionalized relations of mutual respect and acceptance.
Social capital can therefore be defined as a set of formal rules and institutions and informal norms of behavior that together make up the environment in which to articulate and implement the process of "empowerment" (training).

Theorists such as Grooataert and Bastealer (cited after Vehovec, 2002: 36) speak of three dimensions or levels of social capital - the macro, mezzo and micro levels.

At the micro level, a network of individuals and households i created. This creates social capital in its most basic form, building the core of community life. These networks have a formal and informal character. Informal networks stem from the fact of coexistence and sharing of resources upon which the community rests. Formal networks are, however, at this level usually achieved through various NGOs, i.e. civil society organizations, whose primary goal should be to strengthen the social cohesion of society and in this regard encourage empowerment (involvement) of the local community. Empowerment encouraged by non-governmental organizations is based on the creative (productive), rather than distributive power (Hall, 2000: 446). In fact, the most important structures of power are distributive as they assume scarcity of resources for which individuals must compete. On the other hand, the productive view of power assumes that all have power or skills and abilities that only have to be encouraged and channeled in the right direction.

On the mezzo level, networks comprising companies and different public or private organizations, whose goals are cooperation in production, marketing, procurement and product development are formed.These networks can be hard and soft or formal and informal (Franičević and Bartlet, 2000). Informal networking does not require the establishment of contractual relations and is common in small communities, as the various forms of cooperation and partnership in these communities are simply a necessity vital for their survival. On the other hand, the creation of formal or rigid networks is much more difficult, because it depends largely on institutional conditions on the macro level.

The third level of social capital, the so-called macro level refers to the social and economic, as well as political environment and affects the entire local community. The macro level of social capital implies the existence of different standards, rules, laws and other institutions that are the focus of the theory of institutional economics, whose main representative is Douglas North. The macro level creates a framework within which local communities are active and in which decisions about development are made. In other words, this level strongly affects the other two levels of social capital and is often crucial in the process of empowering individuals and communities to manage their environment and future. One can actually claim that only in a case that this level is "friendly" towards the other two levels, there can be individual, interpersonal and interactive change at the community level, of course, assuming that the lower levels of social capital possess a certain level of consciousness, ethics , desires and intentions to act in synergy.

Empowerment of local communities in Croatia as a prerequisite for the establishment of a new development paradigm

Restrictive factors of macro level social capital as an obstacle to an efficiently empowered local community

In the light of the above presented theoretical assumptions, there is a logical question: whether and to what extent is the Croatian society empowered to accept alternative development as a new development paradigm based on principles of sustainability, equity, ethics, cooperation and participation at all levels, especially at the local level, where development actually beginns? Does the current state of development of social capital at the macro, mezzo and micro level allow an implementation of these principles?
Although a superficial insight into the current state of the Croatian society can lead us to conclude that the answer to the above questions is mostly negative, the manifold character of this problem imposes the necessity of a deeper analysis of the causes and consequences, which would in turn surpass the scope of this paper. But let us try to give a short cross-section of the most important factors that could shed more light on the presented thesis about a lack of synergy between various stakeholders involved in the development process at the local level.
In order to better understand the circumstances that have led to the current situation, we should first take into consideration the following factors:
• The historical context of the Croatian state and society until final independence point to the fact that its development was always decided by someone else. These decision-makers imposed their imperialistic, quasi-colonial and other interests by force,without taking into account the real needs and development priorities of the Croatian society. Therefore, one should not be surprised by the fact that at the micro level of social capital, and thus in the local community, a kind of instinct for survival and focus on own prosperity has developed, which often results in activities that have proven to be poor for the benefit of local communities (which, by inertia, still goes on today, illegal house construction being an example).
• In the Croatian society, any form of collective action is often still pejoratively equated with collective (imposed) organization from the communist period.
Besides the legacy of past regimes, especially the communist one, a number of other interrelated factors at the macro level limit the progressive development of local communities and the process of their empowerment in modern Croatia. Stubbs (2006) points out above all:
• The consequences of the Homeland War (physical destruction, massive relocation of population, authoritarian nationalism);
• Economic and social crisis and transition, which have led to the expansion of the regional gap between the rich, mainly urban areas and many, war-affected areas, which are proclaimed areas of special state concern, and are characterized by high unemployment, demographic erosion, tensions between immigrants, returnees and the local population;
• The increase in the number of local administrative units has led to the emergence of many municipalities that lacked trained and capable personnel and were not able to realize sufficient income at the local level in order to be sustainable, which means that the decentralization process in Croatia is actually not implemented adequately;
• But, perhaps the most significant limitation of the progressive development of local communities, as claimed by Malenica (cited after Stubbs, 2006: 5), lies "not that much in the new social division of the Croatian society, accompanied by a significant redistribution of social wealth, social power and social respect, but a deeper crisis of values and trust, which can be seen as both a cause and consequence of this redistribution.“
The aforementioned constraints have led to a number of negative trends related to (im)possibility of implementing the principles contained in the model of alternative development, especially the principles of (economic, ecological and social and cultural) sustainability. Some of them are:
• The inflation in the number of development institutions, there is a drastic increase in the number of national and regional agencies, institutes and committees dealing with programs and strategies of development in different areas, with overlapping, competing and multiple mandates, which causes difficulties to small communities with insufficient staff and insufficient financial resources to decide the optimal strategic direction;
• On the other hand, in most plans, strategies and programs of individual economic sectors, environmental management policies are typically not considered enough and there is a lack of institutional, economic or management instruments in order to implement the steps favorable for the environment. In addition, due to insufficient education about the necessity of preserving and protecting natural and cultural resources, local residents (and local businesses) do not see personal benefit in it. Frequent conflicts of the local population with public institutions that manage these resources, (e.g. public institutions for the management of national parks or nature parks), because of their "safeguarding" activities are considered restricting ownership or indigenous rights;
• Development plans are professionally made, but are often unrealistic and do not meet local needs. The public generally has no confidence in official procedures and is not attempting to influence them, the more so as the process of making plans is often under the influence of political games sponsored by strongest political parties in the local community (supporting the interests of capital and various lobbying groups). On the other hand, the way of presenting information is often too professional and the general public finds it incomprehensible (Fredotović et al., 2003) and, generally speaking, public involvement in the planning process generally takes place ex-post, which actually promotes a policy of continuous "fait accompli";
• Although the Croatian government committed itself to respect the principles of the Agenda 21 UN action plan on sustainable development for the 21st century, a direct institutional response to the provisions of the Agenda at the local level has not proved to be adequate.

The role of nongovernmental organizations, as formal networks at the micro level, in the empowerment of local communities for the implementation of the new development model

In an effort to reduce institutional inefficiency at the macro level, a number of NGOs was established in Croatia, which, as already pointed out, constitute a form of formal cooperation at the micro level of social capital.

This process already began in the early 1990s with the arrival of numerous international humanitarian non-governmental organizations and continued in early 2000s when the European Commission began with the so-called CARDS program, the aim of which was, among others, the strengthening of civil society, promotion of democracy and human rights, which resulted in the emergence of numerous NGOs dealing with these areas.

Nowadays, there are approximately 20 000 registered associations of citizens (Bagić et al., 2004) in Croatia, including 18 000 registered at the level of local communities, but only between 1 000 and 1 500 were active (if we do not count sports clubs and cultural associations). According to some recent estimates of the Croatian Ministry of Environment Protection, Physical Planning and Construction, about 268 NGOs deal with environmental protection. Most deal with environmental problems, while some, such as ODRAZ, an NGO from Zagreb, are focused on sustainable community development in Croatia. It should be noted that in Croatia there is no legal obligation for the local government to cooperate with NGOs, but as the rapprochement to the European Union makes Croatia accept the principles of the European acquis and common development practices, consulting with NGO and their participation in the development decision-making process is becoming a more common practice in our local communities. In recent years, we can witness an upward trend in Croatia of the so-called "meta NGOs", whose primary goal, according to Stubbs (2006) is to provide information and assistance to other non-governmental organizations which are often lacking adequate finances and personnel needed for autonomous application of demanding programs at the local level.

However, generally speaking, Croatia has made significant progress in the development of the civil society. In 2006, a National strategy on the development of civil society and an action plan were adopted, thus creating conditions for a more efficient development of civil society institutions at the micro level.

Vertical and horizontal networks and partnerships - mezzo level of social capital in Croatia

When it comes to activities aimed at strengthening the capacity of key development stakeholders at the so-called mezzo level of social capital (by strengthening formal and informal networks), the main conclusion is that Croatia still shows rare examples of long-term establishment of multisectoral partnerships for community development among various interest groups. Partnerships and networks are indeed established, but at the regional level or, more frequently, at the national level. It is mostly vertical networks incorporating a variety of businesses through the so-called manufacturing or selling types of networks with a motif of efficient resource utilization and better marketing of products (e.g. National Association of Small and Family-run hotels and the Split-Dalmatia Hotel Association, which connects not only hotel operators but also agency providers, airlines, suppliers and similar entities that make up the supply chain). At the local level, partnerships of this type often do not exist because the space of the local community is considered too narrow to adequately articulate the interests of the many subjects that deem the local market insufficiently large. However, regional partnerships also mean a strengthening the role of development stakeholders in the field of local communities involved in regional networks.

Significant progress in further strengthening of the connection of local community development stakeholders can be achieved through the creation of clusters, which, unlike the partnership networks have open membership, based on local social values which enhance confidence, generate demand for a large number of different companies (e.g. tourism-wine-gastronomy cluster), based on cooperation and competition. Unlike business networks that have common business goals, clusters have a common development vision.
According to Porter (1998), long-term competitive advantages in the global economy are very often highly local and resulting from the concentration of highly specialized skills and knowledge institutions, competitors and related businesses and sophisticated consumers. Geographical, cultural and institutional proximity leads to special access, closer relationships, better information, stronger incentives and other advantages in productivity and innovation that is difficult to adopt from a distance. As the world economy becomes more complex, dynamic and knowledge-based, Porter argues, this statement becomes truer.

Conclusions and recommendations

The Croatian society is burdened with problems, many of which are of objective nature, but to an even greater extent they are a result of our own subjective opinions and fears, ignorance and the complex of small nations. For these reasons, we have rejected much of the historical and practical wisdom that this nation has gained for centuries, considering them insufficiently "Western and European" (e.g. the tradition of cooperatives). Nowadays, we are forced to learn again about the necessity of unity, cooperation and partnership in development as that very Europe as our instructor. What is most sorrowful, we receive lessons from abroad about respecting the principles of ethics and morality, having forgotten that this society (which declares itself as a society of strong Christian roots) used to built its identity upon those very principles. Nowadays, sadly, we sink ever deeper into consumerism, we forget the power of those principles which alone have the power to stop further erosion of the Croatian society into the darkness of corruption, selfishness and petty politics.

In that sense the new development paradigm, which rests on previously elaborated the principles of ethics, cooperation, equality and sustainable, is not completely unknown in the Croatian society. We are simply talking about new circumstances that necessarily require adjustment of the fundamental settings of the development paradigm. Therefore, blind adoption of other people's development model has regularly shown itself to be a wrong decision. The Croatian development model should of domestic origin, with the role of knowledge as a key element. This implies a need for immediate and systematic action at all territorial levels (national, regional and local) and all levels of social capital (micro, mezzo and macro). At the same time, learning from others' experiences and examples of good practice is always welcome, not with the aim of defining an universal formula, but to find out why some initiatives had positive effects, while others did not.

Finally, the vision of the future of Croatia cannot be created on partial arenas and can only be a result of a holistic view of the society and its development. However, this vision is still based on the individual. It is the individual who drives the development and for whose goals and needs development is encouraged and directed. Thus, is not necessary that the focus of interest, when it comes to the vision of the future development of the Croatian society, is finally directed to its key factors, the individual, encouragement of his or her knowledge, as well as moral and ethical values from which his or her responsibility for his or her own role in society and development shall be reflected! Otherwise, even the best-defined development objectives and strategies will not be implemented.

In order to give these theories a dose of pragmatism, i.e. to emphasize in what areas and in what ways one should simultaneously work to improve the level of development of social capital in the country and thus the empowerment of individuals and local communities and strengthen their role in shaping the future, we shall give the following recommendations:

• The process of empowerment of the local community requires primarily efficient (not merely formal) decentralization of public administration and development planning activities. Therefore, local authorities should be restructured so as to primarily be a means of protecting the interests of local residents in their administrative area, which, among other things, involves reducing the number of administrative units, the depoliticization of public administration, allocation of additional funds for development projects, strengthening of control mechanisms and obligation of continuous education and training;
• Various programs of training and education should include the local population for its greater involvement in the development process;
• Activities and initiatives of NGOs should not be disturbed by changes of political conditions or because of bureaucratic procedures of public authorities, one should create a general climate of encouragement of socially beneficial actions and activities that NGOs promote. One should also seek to strengthen and promote awareness of volunteering as an acceptable and desirable form of social engagement;
• It is of vital interest to strengthen the synergy of all stakeholders of development and consequently development effects through encouragement of different forms, directions and modalities of formal and informal networks of social capital at the micro and mezzo level;
• A final, but no less important recommendation on this list, is the recommendation for more effective use of various EU initiatives and program in the Croatian society, particularly those intended for empowerment of the local population for development (e.g., development programs such as the Leader).
Finally, it is necessary to point out that, only with the improvement of political, social, psychological and economic empowerment of the local community, one can come to the realization of many goals of sustainable development, namely balanced development, cultural and social integrity and equality and environmental protection.

Professor Lidija Petrić, PhD
Faculty of Economics, University of Split

References

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