| By Anthony Bebbington | Published in World Development, vol. 25 no. 11:1755-1765 |

Abstract: This paper discusses the challenges faced by rural development nongovernmental organization (NGOs) in the Andes and Chile within current contexts of public sector reform and economic liberalization. These changes, and the recognition that previous NGO initiatives have had limited impacts on rural poverty, have helped trigger crises of institutional identity, legitimacy and sustainability among NGOs. Among some NGOs, these crises have begun to elicit institutional responses that address the underlying weaknesses of the NGO sector, and identify more appropriate future roles and identities for NGOs. The paper discusses several such responses, and argues that these changes begin to remove long-standing distortions in the relationships between NGOs and their societies and economies, and thus offer the possibility of longer term institutional sustainability.