The basic institutionalist framework is well-evidenced. Some research has suggested, however, that an exclusive institutional focus risks missing other factors such as political, economic and geographical contextual concerns that are also important for development. The predominant causal role of institutions is not universally accepted: some experts (e.g. Sachs, 2003) posit that factors such as geography and resource endowments should not be underestimated in explaining why some countries have better development outcomes than others. Critiques of the mainstream institutionalist agenda include:
- Experts caution that it is futile to look for empirical regularities linking individual institutional forms to particular outcomes (World Bank, 2012, p. 4; Rodrik, 2004, p. 8-9). For example, the empirical finding that effective property rights are critical for sustainable growth and development offers little guidance on how to establish such rights (Rodrik, 2004, p. 9).
- Developing economies such as China, Botswana, and Mauritius have achieved fast growth under substantially different institutional arrangements (IMF, 2003, p. 113). This suggests that countries’ institutional development differs in pace, sequence, and in ‘more creative and less predictable ways’. The Africa Power and Politics Programme finds that institutional arrangements in ‘developmental patrimonialism’ can generate dynamic growth for periods of more than a decade (Kelsall & Booth, 2010; Booth, 2012, p. S21).
- However, what is ‘good enough governance’ is a contentious issue. Acemoglu and Robinson (2012) find that extractive economic and political institutions will not support sustainable growth in the long term. Grindle (2004; 2007) and Levy (2010) attempt to provide guidance on how to prioritise the overloaded good governance agenda.
- While there is relatively strong evidence that a broad cluster of institutions are essential for long-term development, there has been little unpicking, and a lack of robust evidence, about what specific aspects of institutions are required, in what conditions, and how change happens (World Bank, 2012, p.4; Fritz et al., 2012, p. 12). There is therefore little understanding of what reformers and donors should do differently to address complex, country-specific institutional reform challenges.
- Many of these reforms are ‘wicked problems’: issues that have innumerable and undefined causes and are difficult to understand, and result in outcomes that are uncertain or unknowable (Dentoni et al., 2012).
- 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
- Fritz, V., Fialho Lopes, A.P., Hedger, E., Tavakoli, H., & Krause, P. (2012). Public financial management in postconflict countries. Washington D.C.: World Bank. See document online
- Grindle, M. S. (2004). Good enough governance: Poverty reduction and reform in developing countries. Governance, 17(4), 525-48. See document online
- Grindle, M. S. (2007). Good enough governance revisited. Development Policy Review, 25(5), 533-74. See document online
- International Monetary Fund. (2003). World economic outlook: Growth and institutions. Washington, DC: International Monetary Fund. See document online
- Kelsall, T., & Booth, D.(with D. Cammack & F. Golooba-Mutebi). (2010). Developmental patrimonialism? Questioning the orthodoxy on political governance and economic progress in Africa (Working Paper 9). London: Overseas Development Institute. See document online
- Levy, B. (2010). Development Trajectories: An Evolutionary Approach to Integrating Governance and Growth. Economic Premise, 15. See document online
- Rodrik, D. (2004). Getting institutions right. Harvard University. See document online
- Sachs, J. (June 2003). Institutions matter, but not for everything. Finance and Development. See document online
- World Bank. (2012). The World Bank’s approach to public sector management 2011-2020: ‘Better results from public sector institutions’. Public Sector & Governance Board, Poverty Reduction and Economic Management. See document online
