Introducing international development management
Introducing international development management

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Introducing international development management

4.3 Why are institutions and institutional development important for development?

From the discussion in the last section we can identify two reasons why institutions and institutional development are important for development.

  1. Institutions are the sets of rules that structure development just as they structure any aspect of social interaction. They will govern, for example, who gets what, and how, from development. It is important to get the rules – i.e. the institutions – right. And it is also important to recognise that what is ‘right’ will be contested.

  2. Both forms of institutional development are of significance for development:

    • institutional development as intervention, as a process of consciously and deliberately seeking to establish rules that promote development; and
    • institutional development as history, as a matter of the context in which interventions are designed, both making possible and constraining the scope of such interventions.

In recent years a number of more specific factors have combined to ensure that they are at the core of thinking about how to promote development.

Concern has been expressed about how specific institutions operate and the effects of their operations on development. The list of institutions thus criticised includes, but is not limited to, the following:

  • The state: The second half of the twentieth century witnessed a series of debates over the role of the state. More recently something of a consensus has emerged over the ‘facilitative state’. However, the idea – promoted by commentators on both the right and the left of the political spectrum – that the state might hinder development, that government might fail to promote the public interest, still has currency.

  • The market: Purely market-based solutions are now widely perceived not to have been the all-sufficing means of development they were assumed to be in the 1980s by, for example, the World Bank. There is a growing awareness that markets are themselves socially created and are part of a broader institutional infrastructure. The role of market forces is a focal point for debates about institutional development.

  • Civil society: The institutions of civil society – whether in the narrower form of non-governmental organisations (NGOs) or the broader form of organised social movements of diverse kinds – have come to play particular roles in development that some people find inappropriate and unacceptable. The most obvious example of this is their role as providers of services previously delivered by the state. Such institutions, and their role in development, have attracted a variety of criticisms, most seriously that they lack the accountability of state institutions and that, in accepting state money, they have at the same time accepted a much less radical role in society.

  • Multilateral institutions: The effectiveness and legitimacy of multilateral institutions which operate in development are under question. The World Bank and International Monetary Fund have been criticised by governments in the South, NGOs and others for being ‘top-down’ and inappropriately ideological in their pursuit of market reform, and for not understanding the importance of institutional infrastructure in economic change. The United Nations is frequently accused of being wasteful and ineffective by donor governments and observers. The prominence of these institutions means that questions about how they should operate and what their roles should be are significant questions for the field of development as whole.

In line with this questioning of institutional behaviour, there is a tendency to attribute many failures of development to a failure to develop appropriate institutions.

As one development manager commented:

Institutions have failed as effective development organisations but they still are the linch-pin around which development revolves. Ignore them at your peril.

This sense of institutional failure has been given a sharper edge as a result of the ‘terrorism’ that has assumed a more evidently global form in recent years. The institutions of intelligence, politics and diplomacy are perceived to have failed to comprehend and respond to terrorism adequately, while some would argue that the causes of terrorism lie in the failure of institutions to promote development. The obverse of this – and another factor behind the heightened interest in the impact of institutions – is that a process that might be described as the ‘institutionalisation of insecurity’ has emerged. Amongst the concerns associated with this is the sense that a range of legal and constitutional institutions are being developed – justified in terms of the need to counter terrorism – that have profound consequences for civil rights and for justice more widely. For some people, the ‘success’ of these institutions is no less worrying than the ‘failure’ of other institutions.

Activity 11

To draw your thoughts about institutions and institutional development together, listen to the audio clip linked below in which a number of development practitioners explain how they understand institutional development. The names and organisations of the people you hear speaking are given in the transcript

As you listen to the audio, make summary notes on some of the questions asked in the interviews:

  1. What is the purpose of institutional development?

  2. How do the interviewees see institutional development?

  3. What activities do they think ‘doing’ institutional development involves?

  4. What management skills do they think institutional development requires?

Click to listen to the extract (5 minutes).

Download this audio clip.Audio player: Audio 1
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Transcript: Audio 1

Jo Chataway
Dorcas Robinson of the course team looks at the meaning of institutional development.
Dorcas Robinson
This offers a collage of development manager voices reflecting on the question, what does institutional development mean? To get their responses I set out with my Sony mini disc recorder to find people at work in Britain and Zanzibar.
Change, I see the wider purpose is change.
I think the main point of institutional development is to, to create a sense of liberation.
For me institutional development is essentially the task of developing indigenous forms of organization, formal or informal, that can articulate solutions that come from within, that are accountable to the people who are suffering from these problems.
To me, institutional development is where an institution or an organization will progress or adapt to the changing environment which, in it works.
Dorcas Robinson
I wanted to dig deeper and I asked Tim Jeffery from World Vision UK, Barry Coates from the World Development Movement, and Tamina Rahman from Oxfam, what they mean by institutional development.
Tim Jeffery
I find it very hard to separate institutional development from things like capacity building, and actually I think that these are things that a lot of organizations do without necessarily calling them institutional development or saying that they are doing capacity building. But people are seeking to improve the performance. So I think those sort of key words like performance, efficiency, improving human resources, are all part of what we mean by institutional development.
Barry Coates
The term Institutional Development is generally a very broad one and it’s sort of used to cover everything from organizational behaviour issues and internal communications etc., to people development within the organization, to some sort of strategy and long-term development of the organization.
Tamina Rahman
I think institutional development has been often looked at and tied up with human resources issues, retraining issues, capacity building of staff issues. A major gap has been, it has not been looked at in how values and visions of an organization are translated in institutional development.
Dorcas Robinson
Most of the managers I interviewed talked about organizational issues such as human resources and training, communication and management systems, but hinted at something more. For Thomas Fisher from the New Economics Foundation, we need to be clearer what we mean.
Thomas Fisher
The implications of institutional development, if genuinely understood, can take practitioners way beyond the focus on specific organizations, the focus on specific projects, the focus on specific micro contexts.
Dorcas Robinson
I also talked to Tony Roberts of Coda International Training, David Harding a freelance consultant, and Bob Hodgson of Segal, Quince Wicksteed, about these distinctions and overlaps in practice. They talk about how institutional development can’t be reduced to organizational development, but also about how the two are connected.
Tony Roberts
If it was normal within our organization to talk about these things academically – and it’s not – then we would make a distinction between institutional issues and organizational issues.
In reality we use the terms interchangeably. But I think the institutional issues would be those around culture which, with a three-year programme of organizational development, is almost inevitably bringing about cultural change.
A change in the way the organization perceives itself, the way that people behave within the organization which may relate to gender, which may relate to decisionmaking processes, and hopefully will lead to a cultural change where people always look self-critically at their own work and at the work of the organization.
David Harding
When you’re starting to work with organizations, the questions always come up, for example, in terms of looking at making the organization affective, effective for what and with whom? So you’re immediately looking at the external impact of the organization, you’re immediately looking at who the organization works with, and you’re looking at the setting it works within.
Bob Hodgson
To me, I make a strong distinction between organization development and institutional development where institutional development is the creation of a proper framework where different parties can come together, each with perhaps a well-defined set of responsibilities, that together, but working independently, can contribute to some development objective or some social goal or some economic objective.
Now clearly for each institution to be effective, they have to be an effective organization, but the working out of how best to resource and skill an organization is to me a slightly different area of work to institutional development in the whole.
End transcript: Audio 1
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Transcript: Audio 2

Dorcas Robinson
So organizations and institutions are different, but related. I wanted to know what all this means for actually doing institutional development. Thomas Fisher and Tim Jeffery again.
Thomas Fisher
In organizational development, the tendency is to focus on the internal workings of an organization. Now obviously, in doing that you need to consider the external environment, but that is secondary to working on the internal dynamics of an organization.
In an institutional development you also want to influence the external environment. We were the external facilitators – in an OD intervention usually also involves internal change agents who belong to the organization, but have a role in changing that organization.
The institutional development side had much more to do with communication of ideas, with workshops participatory workshops, which influenced the way people thought about things, the way people behaved with each other, the way people behaved in response to particular issues of concern. So it was a very different flavour, less clear outputs.
Tim Jeffery
In the context of Asia, particularly in countries where we’re now working like Burma and Vietnam, a lot of the work that’s actually going on in those countries is about building up the field office in that country, and is about training individuals within those offices to understand the processes of community development.
Particularly in countries that have been closed for many years, where there hasn’t been the understanding of what community development is, or participatory processes, and in initial years in a sense the actual programmes that those staff are running are probably not as important as the development of the human resource itself.
Dorcas Robinson
So many managers are engaged in changing the perceptions and attitudes of other actors in development, whether they do this in a campaigning mode or through consensus building. Barry Coates and Bob Hodgson again.
Barry Coates
In terms of WBM’s campaign, the sort of things that we want to achieve is changing institutions primarily in the north, in order to influence conditions in the south and this comes from an analysis that, if you look at the causes of poverty, the causes of poverty are often found in the north, rather than the south.
We had a change of government recently in the UK and this has meant a completely new set of conditions around trying to get the sort of changes we want to within a government, and we’ve got new players, we’ve got new alliances, we’ve got new potential allies. So for example, the Department for International Development has now a cabinet post and has a stronger voice in terms of the policies of other departments. So it does tend to change our relationship with other departments.
Bob Hodgson
We tend to be working first of all at a framework level where we’re looking to - we’re looking at a particular development area, and we’re saying, are all the players that are needed to achieve the development objective present? Are there gaps or are there overlaps in responsibilities that needed to be sorted out? Are there mechanisms where each of these separate institutions can understand the roles that they’re expected to play within the development scenario and learn to appreciate the roles that others are expected to play.
And therefore, concentrate on their own business rather that trying to second guess or substitute for other people’s activities. And, what I see as institutional development in that sort of context is building a commonality, a view as to what the objectives, shared objectives are, identifying instruments and policies that they can both buy into, in a way that achieves both their independent set of objectives. And then helping them to identify who the actors are that need to be drawn into the development exercise.
Dorcas Robinson
But if changing the perceptions of other actors in your working environment is an important aspect of doing institutional development, there are also warnings to development managers, as Alex De Waal from Africa Rights points out.
Alex De Waal
I think it’s also very important for those who do institutional development to be acutely aware that their own framework of analysis may be part of the problem, that they have to be open to tearing apart the conceptions they’ve come with from a western society about what is, say, an NGO, what is a human rights organization, what is a civil organization, and reject that and grapple with the much more complicated, political, social, economic, military realities as they are.
End transcript: Audio 2
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Dorcas Robinson
All this talk about changing attitudes and practice made me wonder about institutional failure. What are some of the problems with institutional development?
The development history is littered with institutional failures, an Institutional Development that has gone wrong. The classic example of this has been in the early years of development, trying to develop the government as an institution which can bring about significant positive change for its population. The role of government is very very important and very significant. However, the role of government in implementing particular initiatives has often been very poor. Some of the causes of institutional failure have been the environment and the role of government in creating an enabling environment.
I think individuals who work for humanitarian agencies are in a very difficult position because, actually at the end of the day, they are foreigners in somebody else's country, and it is very very difficult for them to achieve solutions while they remain working for international institutions and if we go down this path of indigenizing the solutions, the international organizations will become smaller, many of these people will lose their jobs. I think that really that the most important thing that the staff working in humanitarian organizations can do is to tell the truth, is really to face up to the realities. Not to succumb to a lot of the propaganda, a lot of the very bland, very superficial depictions in the situation that their fund raisers and the chief executives of these organizations tend to peddle, and to challenge the organizations from within, but that will take some courage.
Dorcas Robinson
As I talked to people, I also began to realize that one person's institutional development can be another's institutional problem. There are conflicting values over what constitutes the desirable institutional development outcome. There are also issues of power.
The question which needs to be asked is, who sets the institutional development agenda? The issue of structural adjustment is an important one here, as Thomas Fisher points out.
Thomas Fisher
There is always the question, what are we doing in doing development? It assumes some concept of progress, it assumes some concept of making things better.
Structural adjustment programmes are clearly institution development programmes. But the outcome of those structural adjustment programmes is still hotly disputed and there are many people within development who feel they have had very negative consequences, particularly on poorer people within the countries concerned. So the World Bank has very clear values, and has a very clear outlook on how it believes the world should operate, how it believes a particular country should operate. So the World Bank would argue that the changes that it has introduced had been positive changes in institutional development because they are in accordance with the values that they espouse.
However, others who are coming from a different value base and have different attitudes will dispute that.
Dorcas Robinson
Peter Poore, Senior Health Advisor from Save the Children Fund UK also makes some interesting observations about the famous Alma Ata Declaration and the involvement of the World Bank in health.
Peter Poore
In 1978 of course, the famous Alma Ata Declaration, a strategy for making a reality out of the 'Health for All' concept, a nice aspiration, a global aspiration.
Most countries of the world are signatories to it, and in institutional terms it meant for us that we could go to pretty well any country in the world and start discussions about support to the health service on the basis of these very sound, largely unexceptionable principles.
There were flaws to it. I suppose some of them being that it was politically highly subversive, it sought to move power from the more powerful to the less powerful, and for that and I think all sorts of other reasons it was never a huge success, certainly not at any national level.
The World Bank looked at health and said, 'well look we've got a limited amount of money, it must be spent cost-effectively, therefore we will treat this disease and not that disease'. It sort of said, look, Health for All's a nice idea but let's forget it, you know it's not possible, so let's go for health for all those who can afford it. Now that abrogation of responsibility if you like, that aspiration, I think our organizations see as a very serious change.
Dorcas Robinson
Tim Jeffery and Bob Hodgson also make important points.
Tim Jeffery
I think potentials of people being involved in their own development processes are that there's a sense of ownership. And that the ideal is that people are actually setting their own directions. They feel that they're involved in deciding where they're going and what their aims are, and therefore they're very much more motivated to be part of that. If you have something passed down to you and told this is where you're going to improve and develop and change, that's very much less motivating than actually being involved in yourself setting the direction and deciding where you should be going, and then getting on board with it. So I think there's great potential in the whole push towards participation.
Bob Hodgson
The real contribution of institutional development is to, I think to, develop what are often independent sources of contribution, independent and legitimately independent separate bodies, to contribute to their perception of their role and their perception of what they're trying to achieve within a broader context.
You can see and, you know, the modern words are sort of vision and stakeholder goals, and, coming together –- all the nice soft cuddly stuff is, has a really hard edge to it when you start working in institutional development and getting these sources of power and influence working together in the same direction.
End transcript: Audio 3
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Dorcas Robinson
So given that behind the idea of institutional development there are conflicting views about how the world should be, what do people think about the whole concept of institutional development? Fatma Alloo, the Director of the NGO Resource Centre in Zanzibar, explains her views.
Fatma Alloo
There was a time I didn’t believe in institutional development. To me, that time institutional development meant hierarchy, it meant management, it meant all the boring things in life. And I was excited by the women’s movement, and I got involved with the whole concept of collective living and collective leadership.
Out of that experience, what happened to me is that I began to realize that although there could be a non-hierarchical approach, a more socialist model of institutional development, there is a need for institutional development.
Dorcas Robinson
Alex De Waal and Tony Roberts also had this to say.
Alex De Waal
Human right historically has come about through popular struggle and through the rule of law, and what we’ve seen over this century, in particular is a coming together of separate traditions of international legal juris prudence, of legal aid and using the courts to support human rights and popular movements like the Indian Independence Movement, like the peace movement, like the trade union movement, like the women’s movement, like the American civil liberties movement.
And then in the last twenty or thirty years, the growth of specific, mainly nongovernmental or inter-governmental institutions dedicated to this idea of human rights almost all of them based in the north. And these have, as it were, tried to create a short cut to the achievement of human rights. Instead of mass mobilization and the law they used journalists, they used none governmental lawyers and so on, to try and create not a mobilization of people but a mobilization of shame to bring international opprobrium on other governments to try and change their policies. It’s becoming much much less applicable. It’s really lost a lot of it purchase on reality, particularly in developing countries.
What many human rights institutions, international ones, are trying to do in Africa for example, is rather than develop or support a popular movement in support to the people’s own rights, they’re trying to set up these slightly floating, slightly ruthless institutions, mirror images of if you like of, Amnesty international, Human Rights Watch, dedicated to human rights, but without the political, social, historical context which has meant that these institutions function quite well in western Europe or North America. And I think we’re beginning to see the shortcomings of that in the incapacity of institutionalized human rights to deal with such gross crimes as the genocide in Rwanda.
Tony Roberts
We can talk about there being two main reasons for engaging in institutional development work. The first one is just based on need and the rationale for that is that government themselves can’t alone address the deficit in development. They can only do it if community organizations participate themselves in development, so we must build the capacity of community organizations to engage in development work. But I think there’s a more valued based reason for doing that as well, and that is that community organizations should be the ones leading and setting the development agenda because it’s their community. So development should be a democratic process which is led by the beneficiaries.
Dorcas Robinson
So finally, I wondered how you know when you’ve done institutional development. Bob Hodgson gave me this answer.
Bob Hodgson
Whenever you have achieved some sort of linking between institutions and achieved a more efficient process or a better understanding of how these different bodies work together, that really is just the starting point. And the world is changing at such a pace and development needs are changing at such a pace that the greatest difficulty is, from those people with the view that says, okay you can come in, you can do a piece of institutional development; at the end of the process you’re got a much better scene and then everything stops, that’s the last thing that should happen. But people, wherever they are, are much more comfortable in a situation that that they think is stable than in a situation that they think is unstable.
And the real trick is managing to create an image of stability while keeping a sufficient dynamic pressure, to have a dynamic institution that is constantly adapting and changing.
End transcript: Audio 4
Audio 4
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Now compare your notes to the summary discussion below.



  1. The interviewees make two main points: firstly, that institutional development is about change and liberation; secondly, that its purpose is to develop the efficiency and effectiveness of partners and indigenous organisations.

  2. Several of those interviewed talk about organisational issues – capacity-building, human resources, efficiency and so on. However, they also indicate that organisational development in itself is not the same thing as institutional development.

  3. Many of these development managers talk about activities pertinent to the organisational level, such as the reorientation of an organisation's management style, from vertical, control systems to horizontal, participatory systems. For a number of those interviewed, the pursuit of institutional development lies in the arena of inter-organisational relationships, in the activities and purposes undertaken beyond the organisation itself.

  4. As those interviewed indicate, the skills required in institutional development can be broad and demanding. It is not about managing projects or organisations as such, although many of the core skills required for this will be relevant to institutional development. What emerge from these development managers are skills of analysis, knowledge of ‘models’, theories and ideas which have been tried in other contexts, and an ability to appreciate different rationalities and to communicate ideas. Also implied are skills of facilitation and negotiation to help build commonality of views and shared objectives. In the final part of the clip, interviewees also talk about their views on the concept of institutional development, reflecting on institutional failures, and on influence and power in setting the institutional development agenda.

To summarise, as exemplified in the interviews in Activity 11, development practitioners use the terms ‘institution’ and ‘institutional development’ in different ways. Those in large, powerful agencies tend to think in terms of changes in broad societal norms and large-scale institutions designed to deliver development goals. Those in smaller agencies, such as many NGOs, often talk of institution building and organisational strengthening as ‘institutional development’. There is also a difference between those who see institutional development in terms of organisational performance, as in:

I find it very hard to separate institutional development from things like capacity-building. These are things that a lot of organisations do without necessarily calling them institutional development or saying that they are doing capacity-building. But people are seeking to improve the performance. So I think those key words like performance, efficiency, improving human resources, are all part of what we mean by institutional development.

and those who see institutional development in more political terms, as in:

I think the main point of institutional development is to create a sense of liberation whereby people think forward to changing their circumstances and situations.

It is not, of course, necessary to choose between different meanings. But it is important to recognise the differences, if we are to build up an appropriately complex and flexible understanding of institutional development.


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