Institutions

Is there an institutional trap in middle-income countries?

Development Matters New social contract , ,

By José Antonio Alonso, professor of Applied Economics at the Complutense University of Madrid. He is co-editor of the recent book: Trapped in the Middle? Developmental Challenges for Middle-Income Countries, Oxford University Press, 2020

It is assumed that, as countries progress, they require better institutions to manage the societal issues that emerge with more extensive and sophisticated markets and respond to the needs of a more demanding society. In other words, the development process requires a path of institutional change. However, economic and institutional processes do not necessarily evolve at the same pace, as institutions are subject to greater inertia. As a consequence, inertial institutions can fall behind social demands, or else changes in institutions may not be properly rooted in social behaviour.

These issues are particularly relevant to middle-income countries which tend to experience episodes of intense economic growth that put their institutional frameworks under pressure. Transforming expansive episodes into sustained economic convergence with high-income countries requires a continuous and successful process of institutional improvement. However, these two processes are difficult to synchronise.

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Normatively weak institutions can be functionally strong: A surprising lesson from China

Development Matters Asia, Policy, Reviving international co-operation , ,

DEV-IN-TRANS-BANNER

By Yuen Yuen Ang, Associate Professor of Political Science at the University of Michigan and the author of “How China Escaped the Poverty Trap“

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

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Guangzhou, China. Photo : shutterstock.com

For the past decades, policymakers and development practitioners have clung to the idea that “good governance” is the solution to poverty. If only poor countries could eradicate corruption, enforce laws, hold leaders accountable and achieve a checklist of best practices, their economic and social problems would be resolved.

This thinking, however, runs into a chicken-and-egg problem: in the first place, it’s hard for poor countries to quickly and meaningfully establish good governance. Indeed, if it were easy to achieve good governance, poor countries would have done it long ago.

But if insisting on one-size-fits all good governance is not the solution, then what is the alternative? My research on China’s development reveals a surprising lesson: normatively weak institutions can be functionally strong. Seen through first-world lenses, the norms and structures found in low-income, pre-industrialised countries are often regarded as “weak” or “backward,” that is, as impediments to development. In fact, these institutions can be creatively adapted or repurposed to kick-start development.
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Why empowering women can make women and men happier

Development Matters Gender, Women and Girls , , , , ,

By Gaëlle Ferrant, Alexandre Kolev and Caroline Tassot, OECD Development Centre

IWD2017The OECD has long argued that the ultimate goal of public policies is to improve the quality of our lives. But what makes us happy? Does living in a country guaranteeing equal rights and opportunities to women and men increase people’s happiness? The answer apparently is yes.

For policy makers interested in the pursuit of happiness, these findings may at first glance come as bad news as we mark International Women’s Day this year. Gender-based discrimination remains, after all, a critical challenge around the globe. Despite changes in gender roles following improvements in economic, political and social rights, no country has achieved gender parity. Only half of working-age women are in the labour force, earning on average 24% less than men (UN Women, 2015). Despite their increasing involvement in the labour market, women still perform 75% of total unpaid care and domestic work (OECD, 2014). And gender-based discrimination in social norms remains widespread worldwide (OECD Development Centre, 2014).
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Instituciones, Gobernabilidad y Desarrollo

Development Matters Latin America and the Caribbean , , ,

Por Danilo Astori, Ministro de Economía y Finanzas de  Uruguay

En la reflexión y la acción acerca de los caminos que conducen a niveles cada vez más altos de desarrollo económico y social, la cadena que nace en las fortalezas institucionales de la sociedad, e incluye como eslabones a la transparencia, la rendición de cuentas y la gobernabilidad, asume una importancia crucial. En tiempos como los actuales, en los que la volatilidad y la incertidumbre, así como los problemas de gobernanza afectan al mundo en su conjunto, es relevante detenerse a examinar el papel a jugar por los conceptos antes señalados.
Es claro que el que refiere al desarrollo económico y social de una sociedad se encuentra íntimamente asociado al de proyecto nacional, entendiendo por tal el que se define como una verdadera cuestión de Estado, definida y ubicada por encima de los partidos políticos y otras organizaciones sociales, así como la de la alternancia de unos y otras en el poder. Continue reading →