Application of rural development policy in see countries: behavioral economics approach

Abstract

The rural development and its specific policy is a relatively new concept for transition countries aspiring to join EU. The South-Eastern Europe countries, Macedonia, Serbia and Bosnia and Herzegovina are transition countries on the way to EU, with substantial rural resources. Therefore, rural development policy is crucial for their sustainable development and quality of life of rural people. In the same time, the impact and success of such policy depends strongly on farmers' attitude, capability, understanding and motivation to use available funds. The aim of this paper is to determine and understand the factors behind the behavior of farm managers when applying for rural development funds. The analytical framework is based on the Theory of planned behavior; where the individual intention to perform a given behavior determines the performance and is shaped by the attitude, social pressure and the perceived behavioral control. This theory is widely applied in various scientific fields; but so far such an approach has not been used in understanding farmers' population and use of rural development programs. The survey took place in November-December 2014, in face-to-face interviews covering 895 farm households in Macedonia, Serbia and Bosnia and Herzegovina. The principal component analysis of the statements related to the farmers' opinions on rural development policies yielded into three logical factor sets related to the farmer's attitude, approval to apply and the perceived abilities of the farmer to use the available measures. The identified factors and their relations could be used for designing a more suitable approach to encourage and guide the farmers to maximize their use of available funds for rural development. This knowledge could serve as a basis for recommendations for policy makers when designing policies and informative materials, and for extension agents and advisors to improve their approach when addressing the rural issues.