Local Economic Development in Latin America: A Study of the Role of the UNDP-Supported LEDAs in Promoting Sustainable Local Economic and Social Development In Latin America

Abstract

This paper is an evaluation of the Local Economic Development Agency (LEDA) model and network operating in Latin America with UNDP support. Originating in the 1980s as one of the supposedly transforming institutions linked to the neoliberal revolution, the commercialised LEDA model was one of the main forms of local economic development support that was to take the place of all state-coordinated and financed local economic development capacity that transgressed neoliberal rules dictating a 'minimal state' and 'full cost recovery' of all organisations. In spite of very little success in the developed countries with the commercialised LEDA model, especially in the UK where the commercialised LEDA model was essentially born in the early years of the Thatcher government, the international development community nevertheless willingly supported its transfer over to developing countries. This evaluation shows that the LEDA model has quite spectacularly failed in developing countries, especially in Latin America, though UNDP has most often presented it as being a succesful model of local development. The field and secondary data clerly shows that most LEDAs in Latin America have either (a) closed down, (b) converted over to become private consultancy bodies and so do not undertake any real development activity, or else (c) survive on a day-to-day basis through small chunks of funding for one-off disparate projects. However, a few LEDAs have been converted back into local government-coordinated and funded bodies, and it is these 'quasi-LEDAs' that have proved to be the most successful. On the basis of this ongoing failure, the rationale behind UNDP’s past and continuing support for the LEDA model is therefore called into serious question. The evaluation essentially confirms the famous observation of Douglass North, and that of Marx a century earlier, that ‘bad’ institutions are often allowed to survive, and may even be encouraged to flourish, simply because it is in the interests of the powerful for this to happen.

Keywords: LEDA, enterprise development, UNDP, local development, latin america