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African institutions today come from local values and the remnants of modern values that survived decolonisation. Thus both state and market function along lines that are unpredictable. African countries are in the process of building an institutional backbone that tries to merge values of their own society with norms that are being pressed upon them by the international community. States in Africa are still in a formative – or re-formative – stage in which reform packages which may work in established state contexts do not easily take root.

Formal institutions operate on an impersonal basis, adhere to written rules, are transparent, and execute agreements precisely. In contrast, informal institutions generally operate face-to-face, use unwritten rules, are confidential and take an ambiguous approach to executing agreements.

There are differences in rationale behind political action in conventional models of analysis and policy practice in Africa. Power in Africa rests in the relations between persons. While the positivist focuses on cause and effect and thinks in terms of policy and getting things done, non-positivists think politics first. In Africa actors tend to operate with a dual utility: one’s own narrow interest and the value inherent in the exchange relations with others. For most Africans, the exchange relation usually weighs more heavily than pure self-interest.

In much African policy making, a full understanding of what can or cannot be achieved with a particular intervention is not sought as a precondition for action. Instead, the political decision is made first, often under dramatised circumstances, in order to produce a sense of urgency. Ends are used to justify means. There are five ways in which African policy making differs from the positivist approach:

• There is often an oversupply of a particular public good because political decisions are made without cost-benefit considerations.
• The politics behind policy is as much about avoiding negative outcomes as producing positive ones due to the countries in Africa being generally poor and the authorities only having limited control over their destiny.
• Informal institutions determine the use of power and thus the distribution of goods is politicised to favour those who are connected to the government through ties of dependence with political leaders.
• A particular policy may be allocated a certain amount of money in the national budget but as it is being implemented various actors may decide to use part of the allocation to either enrich themselves or shift it to another budget post.
• In terms of the way collective action is organised, the notion that a common good is being provided thanks to only a few actors, the others being ‘free-riders’, is too simplistic. Where patronage dominates policy, 'free-riding' tends to disappear, as it is strategic for a ‘Big Man’ to provide goods to others.