Institutional development

About this guide

Literature has not yet settled on a standard definition of 'institution', and the term is often used to satisfy a range of different meanings. This guide defines institutions as 'formal rules, informal constraints - norms of behaviour, conventions, and self imposed codes of conduct - and their enforcement characteristics.' (North, 1991)

A considerable amount of development activity is concerned with helping organisations to improve their performance, but organisations are subject to laws, policies, cultures and norms. To distinguish these formal and informal 'institutions' from organisations, institutions can be viewed as the 'rules of the game' and organisations the 'players.'

Institutions that are created and maintained by rich and powerful elites can discriminate against the poor, excluding them from the benefits of economic growth and social development. Improving institutions is therefore viewed as an important step in supporting structural poverty reduction and promoting sustainable development by facilitating economic growth and subsequently aiding the implementation of pro-poor policies.

This topic guide was prepared by Anna Orrnert. The GSDRC appreciates the contribution of George Larbi (International Development Department, University of Birmingham). Comments, questions or documents for considerations should be sent to enquiries@gsdrc.org.

Latest additions

The following document summaries were added in February 2010:

• Presbitero, Andrea F., 2009, ‘Debt Relief Effectiveness and Institution-Building’, Development Policy Review, Volume 27, Issue 5, pp. 529-559
• Andrea Fleschenberg, 2009, in ‘Afghanistan’s Parliament in the Making: Gendered Understandings and Practices of Politics in a Transitional Country’, Heinrich-Böll-Stiftung, Berlin and UNIFEM, pp27-74
• Fearon, J., Humphreys, M., and Weinstein, J.M., 2009, ‘Development Assistance, Institution Building, and Social Cohesion after Civil War: Evidence from a Field Experiment in Liberia’, Center for Global Development, Washington
• Tuozzo, Maria F., 2009, ‘World Bank Influence and Reform in Argentina’, Development and Change Volume 40 Issue 3, pp 467 - 485

New additions