A new institutional approach to pro-poor agricultural development: Lessons from Asia

Dr. Naya has been one of only two instructors of a course unique to the University of Hawaii called, "The Economics of Cooperation.'' He was an early observer of deliberation councils and other institutions whereby the investment coordination problem was partly solved by extra-market cooperation in the East Asian "miracle'' countries. These insights contributed to The Economics of Cooperation (1992), which featured the role of government as facilitator-a theme of Hawaii State Development Planning when Dr. Naya served on the Governor's cabinet. Reconsidering government as a facilitator, and not as a replacement for markets, is one of the primary contributions of the New Institutional Economics (NIE). This paper extends and applies the facilitation perspective to the problem of agricultural development. Policy failures are detailed and sourced to the fallacy of misplaced exogeneity. In contrast, the method of fundamental explanation, inherent in NIE, acts as a corrective to misguided interventionism that has prevented pro-poor rural development from taking place. (C) 2008 Elsevier Inc. All rights reserved.