This Capstone paper offers insight into integrated, equitable development at the Salvadoran rural level and criticizes the government’s misguided development practices. I propose that community organizations, particularly rural cooperatives, offer a partial solution to rural economic stagnation. The government’s current modernization and adjustment campaign produce results for the macroeconomic environment, but policies which could produce growth at the rural level are negligible. These inappropriate policies have been blamed as the leading causes of rural economic stagnation.

Government programs for the rural sector mainly provide for social development. Economic programs on the other hand do not work towards creating an integrated, equitable system. This lack of policy integration has had alarming effects on the largest sector of the population: the rural poor. Economic policies are not designed to induce economic growth at the rural level. Rural communities and local NGOs in El Salvador recognize the government’s inability and unwillingness to integrate national and local agendas, and are using community organization as a means to combat economic stagnation.

To address this situation, the cooperative movement in the Suchitoto municipality is attempting to find its niche in the new economic order. This process of community organization offers a local solution to the national problem of development stagnation. When properly managed and administered, cooperatives are viable sources of organization and revenue. They can then be linked vertically and horizontally to other development and community organizations. Their democratic and participative nature offers the rural poor a role in the development model. These organizations can provide the movement with the necessary leverage to influence the government’s macro development economic policies.


Growth and Development | International Economics