Martina Pignatti Morano
Participatory planning of economic development and production of local public goods

Abstract: The concept of "participation" appeared in development studies in the late 1960s as a rallying cry for a dissenting vision of development, but it has been partly absorbed nowadays by the mainstream discourse.  This paper describes how different approaches in economic thought have evaluated the performance of such participatory-planning institutions through the XX century. Nowadays, data produced through empirical tools as economic experiments show interesting results on the role of communication in improving cooperation for the provision of local public goods. Such dynamics are explained in this paper through a theoretical account that associates basic tools in Game Theory with Behavioral Economics and Mathematical Sociology. Firstly, through behavioural utility functions of heterogeneous individuals we analyze which conditions allow for a switch from individual to collective rationality in solving problems of coordination failure for the provision of a public good, in a static environment. Secondly, we estimate a learning function of such heterogeneous individuals, micro-founded on results of field experiments, in order to produce an estimate of the growth in production of public goods that can be induced through participatory planning by accountable institutions.

JEL: H41; O21; B21.
Keywords: Participatory planning, local public goods, cooperation, local institutions, rural development.



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