In my last post, I wrote about why institutions matter for economic development. I also highlighted that the theories of institutional economics and of complex systems actually come to very similar conclusions about how institutional structures, underpinned by basic beliefs or paradigms of how the world works, shape relatively persistent patterns of behaviour, which can be both beneficial for, or holding back development. In this post, I want to share a model that describes the dynamics of institutional change. It is largely based on Douglas North’s book ‘Understanding the Process of Economic Change’ , but uses the systems iceberg as a canvas. If you haven’t read my last post, I recommend you head over there and read that one first.Continue reading
Prompted by some work for a client I dived back into the literature on institutions this week. It was a fascinating journey and I have discovered some other the things I have known before and confirmed many of my suspicions with the project at hand. Indeed, the reading confirmed my view that most market systems development projects pay too little attention to the institutions in a country, given their massive importance in shaping economic development. There is too much focus on finding solutions to fixing problems in the short term.
What I found fascinating while reading is that the insights from the theories on institutions and on complex systems actually overlap really neatly, with maybe slightly different ways of approaching change but in a coherent and complementary way.Continue reading
As external development agents, we cannot create impacts with all the qualities we want them to have: sustainable, inclusive, gender-equal, etc. We can only work with and through the system, so these qualities become an inherent part of how the system does things. Let’s say we call a system ‘healthy’ when it is creating these qualities we would like to see (although I’m not sure ‘healthy’ is the best term, it sounds a bit judgemental, but it has been used by others before). The question is how does a healthy system look like that is more likely to deliver impacts with the desired qualities? And how can we improve the health of a system?
There are various bodies of knowledge, all rooted in systems and complexity thinking, that give us some ideas to help answer this question. They all answer them from a different perspective and some are clearly limited in scope while others claim universality. I want to introduce three sets of principles or maybe sets of favourable behaviours here. Continue reading
Quite a few market systems development projects I have come across in my practice have a goal in their logframe to achieve systemic change. In most cases this is spelled out around some or other market function that is supposed to be improved (e.g. improved access of poor farmers to seed). But in some cases, the log frame simply asks for a number of unspecified systemic changes to be achieved. Both cases are interesting in their own right, but particularly in the latter case evaluators need to be able to answer the question “is it systemic change or is it not?”. There has not been a clear way to answer the question.
In this post, I want to introduce two concepts that can be helpful to answer this question. Firstly, the idea of ‘depth of change’ taken from the systems thinking literature, which helps us understand how fundamental a change is with regards to a system’s architecture. Secondly, the idea of resilience and the question if development interventions build the resilience of the market system or economy. Continue reading