Overall, the effects of institutional arrangements on economic growth and development are likely to be context specific (Rodrik et al., 2004: 157-158). Some countries with less inclusive political and economic institutions have experienced (in some cases, spectacular) economic growth and significant poverty reduction (for example, China). Recent research by the Africa Power and Politics Programme distinguishes between more developmental and less developmental forms of neo-patrimonial regimes (Booth, 2012: ix). In some cases, non-inclusive regimes threaten well-being and social peace. But under particular circumstances, some neo-patrimonial, top-down, authoritarian political systems may be capable of delivering some positive development outcomes, such as reduced maternal mortality (Booth, 2012: ix-x; reported in Evans & Ferguson, 2013: 36), for example in Rwanda (Chambers & Golooba-Mutebi, 2012).
Acemoglu and Robinson (2012) argue, however, that exclusive economic and political institutions (which they term ‘extractive’) will not support sustainable growth in the long term. This is because they do not enable dynamic innovation and investment, thought to be the engine of growth. Moreover, exclusive political institutions generate political conflict between groups and individuals (Acemoglu & Robinson, 2012: 430). Others caution that inequality, as found in China, can threaten the social compact that provides the political basis for economic growth and social development (Fan et al., 2008: 2).
Further, a substantial body of qualitative research indicates that exclusive institutions, including discriminatory social norms, trap people in exploitative relationships and push them into chronic poverty (Chronic Poverty Research Centre, 2008: 5-6). Political exclusion and inequality between regional, religious, or ethnic groups has also been linked with higher risks of civil war (World Bank, 2011a: 6).
Research summary: The Chronic Poverty Report 2008-09 Escaping Poverty Traps
This report synthesises evidence on how formal and informal institutions shape chronic poverty, and how to address this. Based on longitudinal (panel) data from multiple countries, it identifies five chronic poverty traps:
- Insecurity: Reduced capacity of poor households to cope with conflict, shocks and natural hazards.
- Limited citizenship: Lack of a meaningful political voice and effective and legitimate political representation and power.
- Spatial disadvantage: Remoteness, certain types of natural resources endowments, political disadvantage and weak integration.
- Social discrimination: Social relationships – of power, patronage, empowerment, competition, collaboration, support – can trap people in exploitative relationships, or help them escape from poverty. These relationships evolve within particular ‘social orders’ such as class, caste systems, ethnicity, or gender-specific roles, responsibilities and rights.
- Poor work opportunities: Work opportunities can be limited, inaccessible, or exploitative for poor people.
Many studies investigate the effects of institutions that discriminate against women and girls. Institutions can condone violence against women and girls, restrict their right to own land, inhibit their economic empowerment by limiting their assets and access to credit, and reduce their decision-making power in the household or in wider political and social life. The effects of this discrimination are negative not only for women, but for development overall (Jones et al., 2010; World Bank, 2011b). Specifically, gender discrimination has been linked to:
- Lower levels of female education, particularly secondary enrolments (Branisa et al., 2013; Cerise et al., 2013)
- Increased fertility rates (Branisa et al., 2013)
- Increased risk of gender-based violence and sexual health risk (Boyden et al., 2012)
- Higher maternal mortality rates (OECD, 2010)
- Higher child mortality and malnutrition (Branisa et al., 2013; OECD, 2010)
- Lower primary school enrolment and completion rates (OECD, 2010)
- Lower agricultural production, household income and food security (OECD, 2012a; Ward et al., 2010)
- Negative impacts on economic growth (Kabeer & Natali, 2013).
- Acemoglu, D. & Robinson, J. (2012). Why nations fail: The origins of power, prosperity, and poverty. New York: Crown Publishers. See document online
- Booth, D. (2012). Development as a collective action problem: Addressing the real challenges of African governance. Synthesis report of the Africa Power and Politics Programme. London: Overseas Development Institute. See document online
- Boyden, J., A. Pankhurst & Y. Tafere (2012). Child protection and harmful traditional practices: Female early marriage and genital modification in Ethiopia. Development in Practice, 22(4), 510-522. See document online
- Branisa, B., Klasen, S., & Ziegler, M. (2013). Gender inequality in social institutions and gendered development outcomes. World Development, 45(0), 252-268. See document online
- Cerise, S., Francavilla, F., Loiseau, E. & Tuccio, M. (2013). Why discriminatory social institutions affecting adolescent girls matter. Issues Paper. Paris: OECD Development Centre. See document online
- Chambers, V. & Golooba-Mutebi, F. (2012). Is the bride too beautiful? Safe motherhood in rural Rwanda. Research Report 04. London: Africa Power and Politics Programme. See document online
- Chronic Poverty Research Centre (2008). Chronic Poverty Report 2008-2009: Escaping poverty traps. Manchester: CPRC. See document online
- Evans, W. & Ferguson, C. (2013). Governance, institutions, growth and poverty reduction: a literature review. London: Department for International Development. See document online
- Fan, S., Kanbur, R. & Zhang, X. (2008). Regional inequality in China: An overview. Introduction to S. Fan, R. Kanbur and X. Zhang (Eds.) Regional Inequality in China: Trends, Explanations and Policy Responses. Routledge. See document online
- Jones, N. et al. (2010). Stemming girls’ chronic poverty: Catalysing development change by building just social institutions. Manchester: Chronic Poverty Research Centre. See document online
- Kabeer, N. & Natali, L. (2013). Gender equality and economic growth: Is there a win-win? IDS Working Paper 417. Brighton: Institute of Development Studies. See document online
- OECD. (2010). Gender inequality and the MDGs: What are the missing dimensions? Paris: OECD. See document online
- OECD (2012a). Do discriminatory social institutions matter for food security? Paris: OECD. See document online
- Rodrik, D., Subramanian, A. & Trebbi, F. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2), 131-165. See document online
- Ward, J., Lee, B., Baptist, S. & Jackson, H. (2010). Evidence for action: Gender equality and economic growth. London: Vivid Economics & Chatham House. See document online
- World Bank (2011a). World Development Report 2011: Conflict, security and development. Washington D.C.: World Bank. See document online
- World Bank (2011b). World Development Report 2012: Gender, equality and development. Washington D.C.: World Bank. See document online