Participatory Appraisal of Competitive Advantage (PACA)

What are the most promising sectors to be promoted in our local area? What are obstacles to local economic development? How can we achieve economic growth? What do businesspeople think about the economic prospects of our area? These are questions that preoccupy many local governments. There is a methodology that helps answering them, called "Participatory Appraisal of Competitive Advantage" (PACA) or, in a more technical way, "Rapid and Participatory Economic Appraisals".

The purposes of this methodology are

• assessing the economic potential of a local area and identifying sectors that deem most promising in terms of growth,

• providing strategies on how to mobilize and unlock this potential and showing ways on how to overcome obstacles and

• getting local stakeholders such as the local government and administration, the business community, local representatives of trade unions, NGOs and the like to work together, creating a true community spirit.

There are a few keywords describing the basic features of PACA. One is "rapid". Traditionally, studies on economic potential were done in an extensive and detailed manner. An enormous amount of statistical data was gathered in order to come up with results that were far from new or "spectacular" for those who live in the area. These studies took time and were expensive. With PACA, it takes from one to two weeks to come up with a comprehensive analysis of the local situation because it focuses on the main issues, does not pretend to be a "scientific" study and taps the know-how and the experience of the local stakeholders.

The other feature is "participatory". Local stakeholders are involved in the preparation, implementation, discussion and revision of the results of the study. By doing so, the implementers of a PACA study (usually consultants from outside the community), seek to, first, tap the information locally available, second, obtain a balanced view on the local situation from different perspectives and, third, make a broad base of local stakeholders feel responsible for the appraisal and act accordingly. PACA does not want to be "just another study", but intends to initiate action.

Now, in more concrete terms, how does a rapid and participatory economic appraisal take place, how is it put into practice? These are the basis steps:

Step 1 - Identifying the necessity to do a PACA
Normally the initiative for such an analysis should come from local actors, ideally by decision of the local government and the mayor. Depending on the local situation, it is also conceivable that the local business or employer's association initiates a PACA but cooperation with the local authorities is highly desirable. In newly constituted municipalities where local decision-makers do not have a lot of governance experience yet, one might also think of an external actor, such as a GTZ project taking the initiative. But this should always occur with a view to strengthening local actors and not acting on their behalf.

Step 2 - Selection of the implementers of a PACA
The consultants should come from outside the local area, because they can act more independently from vested interest and personal feelings. They will bring the methodology with them and act as moderators. They should be technically qualified, but also need to be versatile and experienced in participative approaches. Ideally, a local person (for example a collaborator of the local council or of the business association) should participate in the information collection in order to ensure a maximum of transparency from the onset.

Step 3 - Initial meeting
There should be an initial meeting before the collection of information begins. The purpose is to inform local stakeholders about the purpose and the methodology of PACA. One should also try to invite groups that are not at all or not well represented by any organization, such as the informal sector or poor farmers. The meeting should also be used to ask the participants for support when interviews are going to be conducted by the consultants. It also needs to be pointed out that support means giving honest answers and not to hide information or viewpoints.

Step 4 - Collect information and conduct interviews
At this stage, information is collected primarily by conducting interviews. The persons to be interviewed are businesspeople from the different sectors of the local economy, members of local government and administration, representatives from the providers of infrastructure (electricity, roads, airports etc.) as well as NGOs active in the area. The consultants should use a questionnaire but have enough flexibility to not stick rigidly to it in order to create a good and open atmosphere during the interview. It contains questions related to the evolution of the business or company itself, an assessment of the potential for expansion, the local demand situation or purchasing power, the human resources available in the area, the natural resource endowment and the situation of the infrastructure. The role of the local authorities should also be assessed by the interviewees.

Step 5 - Analysis of the findings and elaboration of a synopsis
Now, the appraisers derive their conclusions from the interviews. A chart is elaborated, with the economic criteria on one side (i.e. demand situation, structure of local enterprises, natural resources, human resources, infrastructure, performance of the municipal administration) and the weak as well as strong spots related to these criteria on the other side. The local person accompanying the appraisers should be invited to participate in the analysis of the findings. The synopsis is "work in progress" and the consultants may also express their doubts with regard to certain aspects.

Step 6 - Workshop with local stakeholders and action plan development
On the final day of the appraisal, a workshop is conducted. A wide variety of local stakeholders participate, their number, however, should not exceed 25 persons. The appraisers start with warming-up activities in order to create a spirit of cooperation. Then, they present the chart - the synopsis - with the analysis of the local economic situation (strengths and weaknesses). The analysis is discussed and, whenever deemed necessary, modified with the participants. Then, small groups are formed. Their task is to define activities that could result in overcoming the weak spots that were identified. These activities are presented and discussed by the participants; finally, they become the "action plan". For each activity within the action plan one should define responsibilities and a deadline or period for its realisation.

Step 7 - Follow-up activities
In principle, it is in the interest of the stakeholders themselves to implement the action plan. In organizational terms, one may create a steering committee or call for meetings with those who took over responsibilities for the implementation of certain activities. However, experience has shown that it is helpful to do the follow-up with external assistance. For example, one could think about calling in the consultants again after a period of time (half a year or a year after the workshop) and ask them to moderate a meeting on the progress and the failures in the implementation of the action plan and, if necessary, to do a replanting of the original action plan.

In reality, one may deviate from one or the other step that has been outlined here and adapt the methodology to the specific circumstances. However, the essential characteristics should always be maintained.

PACA was successfully tested in Brazil, and there is an excellent paper on the methodology including its theoretical background and case studies from Brazil, called "Participatory Appraisal of Competitive Advantage (PACA) (Projector Marketing Municipal) - A Methodology to Support Local and Regional Development Strategy Initiatives, based on the Systemic Competitiveness Concept". You will find it on the website of one of its authors, Joerg Meyer-Stamer. The approach was also tested in three municipal areas in Mozambique. The study that resulted from this may be obtained here from one of the consultants who elaborated it.

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