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.

Leadership

Andrews., M., McConnell, J. and Wescott, A., 2010, ‘Development as Leadership-led Change: A report for the Global Leadership Initiative and the World Bank Institute (WBI)’, HKS Working Paper No. RWP10-009
Development involves change but what does it take to get change done and what role does leadership play in effecting change? This paper examines literature on change in large organizations. Leadership is context-specific and about groups rather than individuals. Leaders are not those who possess a series of traits but those who provide a functional contribution which also helps build change space. Leadership interventions should focus on building functional groups, creating change space rather than creating leaders, and be context-specific.
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Organisations

Leftwich, A. and Sen, K., 2010, 'Beyond Institutions: Institutions and Organisations in the Politics and Economics of Poverty Reduction - a Thematic Synthesis of Research Evidence', IPPG Research Consortium on Improving Institutions for Pro-Poor Growth, University of Manchester
What policy implications emerged from the work of the Research Programme Consortium on Improving Institutions for Pro-Poor Growth between 2005 and 2010? This paper provides an overview, highlighting that while institutions matter for development, organisations matter for institutional formation and efficacy. The interaction of individuals, organisations and institutions is at the heart of the politics and political economy of development. Policymakers therefore need to think 'beyond' institutional design; they need to strengthen economic, social and political organisations that can advocate, negotiate, implement and monitor effective and locally legitimate institutional arrangements. This requires a long-term, experimental and thus flexible approach.
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The ‘formal’ and ‘informal’

Casson, M., Della Giusta, M. and Kambhampti, U., 2010 ‘Formal and Informal Institutions and Development’, World Development, vol. 38, no. 2, pp 137-141
How do formal and informal institutions influence each other and the process of development? This paper presents a critical review of the literature on institutional change and the role of institutions. Issues of equity, economic rules and regulations, caste, religion, social capital and elite groups impact on the dynamics of institutions. It is necessary to further analyse the ways in which informal institutions both shape formal institutions and change the interactions of agents in social organisations.
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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 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 and racial inequality - 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 chapter 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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Jones, N. et al., 2010, ‘Stemming Girls’ Chronic Poverty: Catalysing development change by building just social institutions’, Chronic Poverty Research Centre, University of Manchester.
Do social institutions result in gender differences in the incidence of poverty? This paper finds that discriminatory family codes, son bias, limited resource entitlements, physical insecurity and restricted civil liberties play a role in chronic poverty, specifically that of young women. It is therefore important to: eliminate gender discrimination through legal provisions; support girls' participation in decision-making; invest in child- and gender-sensitive social protection; extend services to hard-to-reach girls; strengthen girls' resource access; and promote girls' control over their bodies.
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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 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 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 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 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 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. A gradual approach facilitates both experimentation to achieve ‘best fit’ to context and the ongoing incorporation of national lessons learned. This approach may address certain key sectors first, or it may involve the setting up of transitional institutions. Priority institutions are those that are most important for building public confidence in the state and delivering basic services.

World Bank, 2011, 'From Violence to Resilience: Restoring Confidence and Transforming Institutions', in World Development Report 2011: Conflict, Security and Development, World Bank, New York, ch.3
How can countries escape the vicious cycle of fragility and move towards a virtuous cycle of confidence building and institutional transformation? This chapter sets out a framework that involves: 1) restoring confidence; 2) early attention to the reform of institutions that provide citizen security, justice and jobs; 3) reform approaches that allow for flexibility and innovation; and 4) marshalling external support and resisting external stresses. This endogenous spiral of confidence building and institutional transformation should be continually expanded. It must also be adapted to context. Outsiders can help by reducing external stresses as well as providing support.
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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 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 complex nature of institutional change

Social processes and policy impacts are complex and unpredictable. Thus, 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.

Woodhill, J., 2010 ‘Capacities for Institutional Innovation: A Complexity Perspective’, IDS Bulletin, vol. 41, no. 3, pp 47-59
How is it possible to catalyse institutional innovation? This paper argues that this requires enhancing societies' overall learning capacities in ways that enable greater responsiveness and resilience to emerging risks. It is important to engage in developing the 'soft' capacities of communication, trust building, diplomacy, networking, making sense of messy social situations, political advocacy and leadership. Requisite capabilities for this are navigating complexity, learning collaboratively, engaging politically and being self-reflective.
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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 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? 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. International support has often been fragmented, slow, had a short timeframe and relied heavily on technical assistance. The additional complication of donors’ 'dual accountability', (both to domestic constituents and to the citizens of the recipient country), constrains effective support.

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 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 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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Casey, K., Glennerster, R., Miguel, E., 2011, 'Reshaping Institutions: Evidence on Aid Impacts Using a Pre-Analysis Plan', NBER Working Paper No. 17012, National Bureau of Economic Research, Cambridge, US
'Community driven development' (CDD) has become a popular donor strategy in seeking to improve local institutions in developing countries. This study evaluates a CDD project in Sierra Leone that combined block grants for local public goods with intensive training and requirements for minority inclusion designed to catalyse collective action and empowerment. The study finds positive short-term effects on local public goods provision and economic outcomes, but no sustained impacts on collective action, decision-making processes, or the involvement of marginalised groups in local affairs. It also indicates the value of a pre-analysis plan in avoiding distorted results.
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World Bank, 2011, 'International Support to Building Confidence and Transforming Institutions' in World Development Report 2011: Conflict, Security and Development, World Bank, Washington DC, ch. 6
How can international actors more effectively support transitions out of violence and fragility? This chapter outlines trends in the international architecture that affect the ability to respond effectively in fragile and violence-prone settings. It argues that international agencies are geared to minimising domestic reputational and fiduciary risk – increasingly so – rather than supporting 'best-fit' institutional solutions that match political realities on the ground. The principle barrier to effectiveness is international agencies' dual accountability to domestic constituencies and citizens in recipient states. Development agencies also need to address critical gaps by focusing more on citizen security, criminal justice and job creation.
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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 and non-profit organisations as to private sector organisations. It recognises that 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.

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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 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.

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