The Potential for Community Development Foundations in Resource-Abundant Countries: A Window of Opportunity for Madagascar
Governments have attempted a number of strategies to address the high expectations of citizens. Two commonly used approaches are reviewed in this paper. The first is to allocate by law a well-defined portion of revenues for the specific purpose of redistribution through local levels of government (Mali and Peru are examples). A second approach is to set up a legally mandated "trust fund" that may be publicly or privately managed, with the purpose of ensuring that negative effects from mining are addressed and to ensure the availability of resources over the long term, long after the natural resources have been exhausted (for example, the Chile Copper Fund).
A smaller scale approach is for companies to set up community development funds to ensure that local expectations are at least partially met. These corporate efforts, however, do not substitute for the longer term responsibilities of government and the relationship between different levels of government and of citizens. Yet some of the older foundations have been effective in filling gaps in government services. All three approaches are discussed in depth.