Strengthening inclusive institutions involves transforming power relations and incentives. Several tools are available to understand how power is exercised, and the relationships between formal and informal institutions, actors and organisations in society.
Tools for analysing institutions
- Political economic analysis: see GSDRC Topic Guide on Political Economy Analysis (Mcloughlin, 2012); How To Note: Political Economy Analysis (DFID, 2009b); and the World Bank’s sourcebook, Tools for Institutional, Political, and Social Analysis of Policy Reform (World Bank, 2007).
- Power analysis: the online resource powercube.net contains practical and conceptual materials to help respond to power relations within organisations and in wider social and political spaces (Institute of Development Studies, University of Sussex).
- Gender analysis: How to Note: Gender and Social Exclusion Analysis (DFID, 2009a) and Gender Responsive Social Analysis: A Guidance Note (World Bank, 2005b).
- Institutional appraisal and development: DFID’s (2003b) Source Book provides tools and techniques for conducting institutional appraisal and development.
- Poverty and Social Impact Analysis: uses ex ante analysis to investigate the possible distributional impacts of public policies, with particular emphasis on the poor and vulnerable. See the World Bank’s Good practice note: Using PSIA To Support Development Policy Operations (2008) and supplementary guidance Integrating Gender into PSIA (2013b) and Enhancing In-country Partnerships on PSIA (2012).
Applying PSIA in Uruguay
Poverty and Social Impact Analysis (PSIA) was used by the World Bank to support Uruguayan tax reform in 2008. The rapid and rigorous quantitative analysis reportedly contributed to policy dialogue, helped build local capacity and cultivated country ownership. It also informed the public and built a parliamentary consensus on the benefits of reform.
Source: Masood & Sinnott (n.d.).
Analysing institutions can enable a better understanding of where development aid is needed and provides a benchmark for tracking reform progress. There are several approaches to measuring the degree to which institutions are inclusive. These include:
- Cross-country indexes of institutions: The World Bank’s Worldwide Governance Indicators (WGI) provide data on perceptions of institutions, including whether states make decisions for public good or private gain, and the quality of citizens’ participation in political processes (Kaufmann et al., 2010). The OECD’s Social Institutions and Gender Index (SIGI) measures institutional drivers of gender inequality, including codes of conduct, norms, traditions, discriminatory inheritance practices and violence against women (OECD, 2012c; OECD, 2013; Branisa et al., 2009). Other indices of gender institutions include the Women’s Economic Opportunities Index (Economist Intelligence Unit), and the Indices of Social Development database (Erasmus University).
- Cross-country indexes of inequalities: Inequality is sometimes used as a proxy measure of social inclusion. Attributing the effect of institutions on inequalities is, however, problematic. UNDP, OECD and the World Bank have introduced a number of initiatives to improve the cross-country measurement of inequalities. These include adding to the UNDP’s Human Development Index (HDI) an inequality-adjusted HDI as well as a multi-dimensional poverty index and a gender inequality index (see box below).
- Government monitoring: Governments also measure inequality and exclusion at national and sub-national levels. This can be highly political and controversial, leading to delayed reporting or the suspension of initiatives.
Indexes for measuring institutions and their outcomes
Global indexes with some institutional measures
- Worldwide Governance Indicators (World Bank): cover over 200 countries and territories, measuring six dimensions of governance starting in 1996.
- Social Institutions and Gender Index (OECD): launched in 2009, covering 160 countries and measuring institutional drivers of gender inequality outcomes.
- Women’s Economic Opportunities Index (Economist Intelligence Unit): introduced in 2010, covering 184 countries and 26 indicators of resources, institutions and capabilities in areas such as labour policy and practice; education and training; women’s legal and social status (van Staveren, 2011).
- Indices of Social Development database (Institute of Social Studies, Erasmus University): first published in 2010 covering 184 countries. It tracks some input measures: mainly resources and rights, and attitudinal measures (van Staveren, 2011).
Global indexes that measure outcomes
- Human Development Index (HDI) (UNDP): introduced in 1990, a composite measure of health, education and income covering 180 countries. The HDI has been improved through disaggregation for income, geographical, gender and ethnic groups and in 2010 by the introduction of a multi-dimensional poverty index; an inequality-adjusted HDI; and a gender inequality index.
- Multidimensional Social Exclusion Index (UNDP): introduced by UNDP in 2011 and used to measure social exclusion in six countries in Europe and Central Asia (UNDP, 2011).
- Better Life Index (OECD): compares well-being across OECD countries, based on 11 topics covering material living conditions and quality of life.
- Human Opportunity Index (World Bank): measures how personal circumstances (birthplace, wealth, race or gender) can affect a child’s access to basic services. It was published in 2008, updated in 2010, and applies to Latin American and Caribbean countries.
- Branisa, B., Klasen, S. & Ziegler, M. (2009). The construction of the Social Institutions and Gender Index (SIGI). Background Paper. Paris: OECD. See document online
- DFID (2003b). Promoting institutional appraisal and development: A sourcebook of tools and techniques. London: Department for International Development. See document online
- DFID (2009a). Gender and social exclusion analysis: How to note. A DFID Practice Paper. London: Department for International Development. See document online
- DFID (2009b). Political economy analysis: How to note. A DFID Practice Paper. London: Department for International Development. See document online
- Kaufmann, D., Kraay, A. & Mastruzzi, M. (2010). The Worldwide Governance Indicators: Methodology and analytical issues. Washington D.C.: Brookings Institution. See document online
- Masood, N. & Sinnott, E. (no date). Equity and social impacts of tax reform in Uruguay. PSIA in practice. Washington D.C.: World Bank. See document online
- Mcloughlin, C. (2012). Topic guide on political economy analysis. Updated version. Birmingham: GSDRC, University of Birmingham. See document online
- OECD (2012c). 2012 SIGI Social Institutions and Gender Index: Understanding the drivers of gender inequality. Paris: OECD. See document online
- OECD (2013). Social Institutions & Gender Index. OECD. See document online
- UNDP (2011). Beyond transition: Towards inclusive societies. Bratislava: UNDP Regional Bureau for Europe and the Commonwealth of Independent States. See document online
- van Staveren, I. (2011). To measure is to know? A comparative analysis of gender indices. Indices of Social Development Working Paper No. 2011-02. The Hague: Institute of Social Studies See document online
- World Bank (2005b). Guidance note on gender responsive social analysis. Washington D.C.: World Bank. See document online
- World Bank (2007). Sourcebook for tools for institutional, political, and social analysis of policy reform. Washington D.C.: World Bank. See document online
- World Bank (2008). Good practice note: using poverty and social impact analysis to support development policy operations. Washington D.C.: World Bank. See document online
- World Bank (2012). Enhancing in-country partnerships in poverty and social impact analysis (PSIA). A Guidance Note. Washington D.C.: World Bank. See document online
- World Bank (2013b). Integrating gender into poverty and social impact analysis. Guidance Note for Task Teams. Washington D.C.: World Bank. See document online