Rural Institutions in the Philippine Settings

Institutions in this context mean economic, social and political organizations,

together with the rules, laws and regulations that govern their interaction. The

institutional framework mediates the access of the poor to assets, to financial and other

services, to technologies and markets. It determines the extent to which poor groups

benefit from the production generated by these assets and services.

Institutions are defined as “rules by which agents interact and the organizations

that implement rules to achieve desired outcomes” (World Bank: World Development

Report, 2002). It is of fundamental importance to assess the endowment, functioning

and interaction of institution and organizational mechanisms in the community. This step

helps assess the institutional capacities of the supported society and also serves as an

institutional approach to poverty alleviation

Meier (2001), a development theorist, agrees that institution plays an important

role in the development of a country. He explains institutional failures and draws

attention to the inevitable collective action problems at both state and local levels.

Institutional failure has caused a wide range of economic and development problems,

ranging from asymmetric information, missing markets and moral hazard of governance

and regulation issues. The problems concerning dysfunctional or nonexistent institutions

are believed to be severe in developing economies (Mongsawad, 2010), that

significantly affected their economic development.

 The role of local institutions is becoming more important for sustainable rural

development, they act as a catalyst in the coordination of various rural development

activities to maximize and sustain rural development efforts.

1. Non-Government Organizations

Help local organizations and institutions to internalize participatory self-

assessment procedures to measure and monitor performance of the organization

as well as the development and management processes.

2. Central Government and Local Government Institutions

Play a critical role in the development and implementation of effective

poverty reduction policies, high level strategic planning, assessing the availability

of the nation’s resources, designing alternative development plans, selection and

implementation of such plans, and monitoring and evaluation (M&E) and other

factors that intended to shape the opportunities of the poor communities that are

not determined at the local level

3. Private Sector

With decentralization, government’s role as the provider, owner, manager,

protector and developer of rural areas will be diminished and a gap will be

created to be filled by the private sector and community organization.