Institutional development

Institutional change and impact evaluation

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Institutional change
Impact evaluation
Tools
Additional information resources

Institutional change

The process of institutional change can be subject to a number of variables which determine the way in which an institution evolves and also the level of constraints acting upon factors which promote change. Research has highlighted a number of potential constraints and determining characteristics of institutions.

The ‘formal’ and ‘informal’

Srivastava, M., 2004, 'Moving Beyond 'Institutions Matter': Some Reflections on How the 'Rules of the Game' Evolve and Change', Crisis States Discussion Paper Series no. 4, Development Research Centre, London School of Economics
The role of institutions in influencing development is widely recognised. Yet there are no clear answers regarding which institutions best support development and how to acquire them. This paper for the Crisis States Development Research Centre assesses the effectiveness of various theories in unravelling these complex issues.
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Social exclusion

Social exclusion - for example, in terms of gender inequality and multicultural rights - can have deeply embedded cultural and historical roots. Understanding exclusion and structural inequality is key to developing appropriate public policy instruments and promoting inclusive and accountable states.

Dani, A. A. and Dehaan, A., 2008, ‘Social Policy in a Development Context: Social Inequalities and Inclusive Institutions’, in Dehaan, A. and Dani, A. A. (eds.), ‘Inclusive States: Social Policy and Structural Inequalities’, World Bank, pp. 1-37
How can states achieve the Millennium Development Goals in the context of severe social inequality? This introductory chapter from a World Bank book (part of the series New Frontiers of Social Policy) argues that the effective governance institutions necessary for achieving these goals can only emerge from policies that promote inclusion. There need be no trade-off between promoting inclusion and promoting economic growth. Rather, inclusive institutions can provide better services for the whole population, build human and social capital, increase agency and the rule of law and facilitate more sustainable and equitable economic development.
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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
How can a viable Afghan parliament be developed that will serve citizens' interests and promote peace and reconstruction? What are possible entry points for parliamentary institution-building, particularly regarding female parliamentarians (MPs)? This report from Heinrich-Böll-Stiftung and UNIFEM is based on extensive interviews with Afghan parliamentarians during 2007-2008. Women's parliamentary participation is of the utmost importance, but is largely dependent on the overall gendered political and security context as well as the progress of and challenges to state- and institution-building. Nevertheless, female MPs' political effectiveness could be increased through mutual cooperation and networking.
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Country-led paths to change

Institutional change will seldom follow a simple, linear path to a pre-determined end-state. Institutional frameworks vary from country to country and it cannot be assumed that reform can be achieved by emulating a certain set of institutions. What is important is that policies are tailored to local contexts and norms rather than imposed from above by governments or donors.

Luiz, J. M., 2009, ‘Institutions and Economic Performance: Implications for African Development’, Journal of International Development, Volume 21, Issue 1, pp. 58-75
How are sub-Saharan Africa’s (SSA) institutions helping or hindering economic development? This paper from the Journal of International Development explores current theories on how institutions impact economic growth in SSA. ‘Good’ institutions could be the key to increasing the stagnant economic growth in this region. Any attempt to build ‘good’ institutions must consider the existing impediments of poor political institutions, weak social capital and weak state capacity.
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Bourdeaux, K., Aligica, D., 2008, ‘Paths to Property: Approaches to Institutional Change in International Development’, Mercatus Center, George Mason University
What are the best strategies for creating an institutional environment conducive to securing stable property rights? This publication from the Institute of Economic Affairs draws on examples from sub-Saharan Africa to illustrate a process-oriented view of institutional change. There is no 'correct' path to property rights protection. Only by understanding the historical and institutional context can sustainable reform and its consequent economic dividends be achieved. Property rights policy should be regarded as a strategic and dynamic process, rather than as a blueprint-based exercise in social engineering.
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Changes in laws, policies and administrative structures are not in themselves sufficient to bring about better development outcomes. Much also depends on the nature of social relationships within a particular context, community understandings of accountability, local incentives, and cultural attitudes.

Faguet, J-P. and Ali, Z., 2009, ‘Making Reform Work: Institutions, Dispositions and the Improving Health of Bangladesh’, World Development, Volume 37, Issue 1, pp. 208-218
What is the role of social attitudes in supporting institutional reform? This article from World Development explores the institutional and social underpinnings of service provision by comparing decentralised health provision in the Bangladesh upazilas (sub-districts) of Rajnagar and Saturia. Regional variation in health outcomes is explained by the presence or absence of a dense web of relationships that enmeshed reformers in local systems of authority and legitimacy. Policymakers must focus on tailoring service provision to the specific needs and characteristics of the population. This involves increasing local level participation, improving accountability mechanisms, and providing incentives for good performance.
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Indeed, in the chapter below Mary Shirley argues that the impetus for true institutional change can only come from within the particular society in question, for example, when local scholars develop new policies, paradigms and conceptual models.

Shirley, M., 2008, ‘The Role of Scholars and Scholarship in Economic Development’, in ‘Institutions and Development: Advances in New Institutional Analysis’, Edward Elgar Publishing, Cheltenham, UK
What is the role of scholars and scholarship in institutional change? How do shared beliefs shift so that self-enforcing and persistent institutions change radically? This chapter from Institutions and Development, published by Edward Elgar, argues that the impetus for changing institutions must come from within a society. When leaders believe that their present policies cannot cope with an economic shock or an external threat, local scholars can act as institutional entrepreneurs by devising and disseminating a new conceptual model of how the world works and a related set of policy reforms. Under the right circumstances the initial reforms institute a persistent and gradual transformation of institutions.
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Institutional reform policies are also more likely to succeed if they are allowed to develop gradually. Such a gradualist approach may address certain key sectors first, or it may involve the setting up of transitional institutions.

Khwaja, M. I. and Khan, S., 2009, ‘Reforming Institutions: Where to Begin?’, Pakistan Institute of Development Economics, Islamabad
How can institutions in Pakistan be reformed? This working paper from the Pakistan Institute of Development Economics analyses the current literature on institutional change. For institutional change to happen, cultural belief systems must be shaped in a way that provokes a shift in the institutional power structure. Given the current institutional framework and social situation in Pakistan, institutional reform should focus on changing cultural belief systems through education policy reform.
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The unpredictable nature of institutional change

Social processes and policy impacts are unpredictable, and institutional change can produce unintended procedural and policy consequences. The broader institutional context in which an altered institution is embedded influences the likelihood and extent of such unintended outcomes. Research indicates that the risks that emerge from such uncertainty of outcome can be planned for and mitigated.

Adler, D., Sage, C. and Woolcock, M., 2009, ‘Interim Institutions and the Development Process: Opening Spaces for Reform in Cambodia and Indonesia’, Brooks World Poverty Institute Working Paper 86, Manchester
How can donors facilitate the development of better governance institutions in developing countries? This paper from the Brooks World Poverty Institute analyses current development practice in institution-building through two case studies in Cambodia and Indonesia. It argues that traditional, linear, technically-driven approaches are unproductive due to the inherent unpredictability of socio-political processes. Donors should instead embrace the concept of ‘interim institutions’ as a means of promoting equitable political contestation and facilitating positive and sustainable change.
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Cortell, A.P. and Peterson, S., 2001, 'Limiting the Unintended Consequences of Institutional Change', Comparative Political Studies, Vol. 34, No. 7, Pp. 768-799.
In the past two decades, scholars in sociology, economics and political science have simultaneously rediscovered the importance of institutions as guides and constraints on human behaviour. But under what conditions do institutional reforms produce unintended policy consequences? Compiled for Comparative Political Studies, this paper uses two empirical case studies to demonstrate that it is the broader institutional context in which the institution is embedded that influences the likelihood and effect of unintended outcomes.
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Donor interventions

The ability of international actors to bring about institutional change has been questioned, as the case studies below indicate.

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
Can brief, foreign-funded efforts to build local institutions have a positive effect on governance, cooperation and well-being? This paper from the Center for Global Development reports on a project carried out by the International Rescue Committee (IRC) in northern Liberia. This community-driven reconstruction (CDR) project attempted to build democratic, community-level institutions for making decisions about local public goods. The project was successful in increasing social cohesion, with some evidence that it reinforced democratic political attitudes and confidence in local decision-making. Evidence on improved material well-being was weak.
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Tuozzo, Maria F., 2009, ‘World Bank Influence and Reform in Argentina’, Development and Change Volume 40 Issue 3, pp 467 - 485
How has the World Bank influenced institutional reforms in Argentina? During the 1990s, the World Bank increasingly promoted the concept of governance reforms. This article from Development and Change looks at governance reforms in Argentina’s judicial sector. The World Bank’s approach to institutional reform has been donor-driven, overly technical and based on restricted forms of decision making. This approach contributed to inadequate initiatives in Argentina and is likely to yield disappointing results elsewhere.
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Impact evaluation

Impact evaluation of projects and programmes enables identification of the effects of an institutional intervention. This can have different purposes during different stages of an intervention, including measuring progress towards desired outcomes, learning lessons about the process, or assessing institutional readiness to move on to a new phase. Impact evaluation needs to be built in to the intervention from the outset, by deciding what to monitor and why, how the monitoring will be done, and how information will be collected.

The European Foundation for Quality Management (EFQM) Excellence Model
DFID promotes the use of the European Foundation for Quality Management (EFQM) Excellence Model, which provides a framework for assessing the aspects of performance that make and organisation successful, and can be a useful tool in institutional interventions.

The model was designed to be a generic model and is as applicable to 'non-business' oriented organisations such as government departments and agencies, non-profit organisations etc, as private sector organisations. It recognises there are many approaches to achieving sustainable excellence in organisations, and provides considerable freedom for interpretation to reflect strategies which are appropriate for an individual public sector entity given where it has come from, the cultural climate, country diversity, modernisation progress, and political climate. It can be used to help organisations recognise institutional issues that must be addressed as well as provide measures for evaluating the impact of change on performance.

Tools

The following toolkits provide tools and techniques to support the various stages of institutional intervention outlined above.

Wilson, D., and L. Beaton, 2003, 'Promoting Institutional & Organisational Development: A Source Book of Tools and Techniques', Source book prepared for UK Department for International Development, London
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Mathauer, I., 2004, 'Institutional Analysis Toolkit for Safety Net Interventions', World Bank, Social Protection Discussion Paper No. 0418
In the wake of the economic crisis in the late 1990s, safety nets that mitigate the effects of poverty and other risks on vulnerable households have experienced renewed interest. What are the institutional challenges relating to safety net interventions? How can institutional analysis propose solutions to enable better outcomes? This paper from the World Bank provides a toolkit on the institutional capacity of the major components of formal safety net interventions and provides guidelines on key performance issues.
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European Institute of Public Administration, 2006, 'The Common Assessment Framework: Improving an organisation through self-assessment', EIPA document prepared for 2nd Quality Conference for Public Administration in the EU.
The Common Assessment Framework (CAF) is a tool to help public sector organisations use quality management techniques to improve performance. A pilot version of the CAF was presented in May 2000 and a first revised version was launched in 2002. Since then, nearly 900 public organisations have used the CAF. On the basis of their experiences a third revision was undertaken in 2006. This paper outlines the main considerations in conducting organisational analysis and recommending post-assessment improvements.
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Additional information resources

Capacity.Org is a platform for exchange and access to information on capacity development.
The World Bank's Independent Evaluation Group includes resources on impact evaluation.