ABSTRACT
Development economics, as it emerged as a branch in its own right in the 1950s and 1960s, was very much concerned with institutional transformation. The classic development literature-Arthur Lewis or Gunnar Myrdal, for instance-is rich in institutional detail. Development was seen as a process of institutional change, as ‘traditional’ institutions were supplanted by modern, each with their own complement of economic and social mechanisms. The co-existence of differing systems of economic and social organization, each with its own rules for the creation and distribution of value, gave rise to models of dualistic development which implied the presence of powerful institutional forces. The diversity of systems of social organization demonstrated that exchange could occur within a variety of alternative institutional frameworks. Given the normative approach of much of the development literature, the question was which system was most likely to induce economic development. Promoting development implied promoting the institutions to support development. Institutions then came to be viewed in a very concrete way: banks to extend rural credit, local planning infrastructures, markets, community organizations, agricultural extension services. A telling example is the entry for ‘institutional development’ in the index of an influential World Bank publication on rural development from the mid 1970s (Lele 1975); it reads, ‘see Program administration’.
