ABSTRACT
At the core of governance are institutions, understood as structures of rules, procedures, and organizations, whether state-provided or otherwise. They range from transnational constitutions to the microstructures of reciprocity and self-regulation in informal commerce. Institutions are not synonymous with governance. They are not the alpha or the omega but the mid-point-they mediate between society’s conflicts and capacities, on the one hand, and its need for results on the other hand. The sage observation
that ‘[c]ulture is the mother and . . . institutions are the children’ (EtoungaManguelle 2000, p. 75) captures one part of this, while the burgeoning New Institutional Economics literature linking institutions to effective government and economic growth expresses the second aspect. We are past the time when capital transfers were thought to fuel ‘take-off,’ or structural adjustment to ‘get prices right’ was considered the key to development. We have come full circle, through the work of scholars such as Douglass North and Robert Putnam, to the much earlier insights of Max Weber. The matrix of social, cultural, demographic, and historical factors influences a society’s ability to translate leadership into effective institutions, that is, structures capable of offering adequate answers to the challenges of coordination and public goods provision.
