Swedish international development cooperation agency

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UTV Working Paper 2005:3

Supporting the Development  

of Institutions

– Formal and Informal Rules 

An Evaluation Theme

Basic Concepts

Gun Eriksson Skoog

  

Department for Evaluation and Internal Audit

SWEDISH INTERNATIONAL DEVELOPMENT 

COOPERATION AGENCY

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Foreword

Institutions – formal and informal rules within which humans and organisations interact and perform – 

play a crucial role for sustainable development. However, existing institutional set-ups in many countries 

prevent development from taking place, just as they may render development co-operation ineffective. 

Donors recognise this. Hence, supporting institutional development is a strategic issue – increasingly so, 

not least in light of  the Paris Declaration and current trends towards programme support and capacity 

development at system level. Institutional development is not easy, however, and experience-based knowl-

edge about how to successfully support such processes is limited. Still, it is increasingly recognised that 

donors need to both consider and affect the broader institutional and political context. The importance 

of  informal rules is also underscored.

In 2004, Sida’s Department for Evaluation and Internal Audit (utv) launched an evaluation theme on 

support for the development of  formal and informal rules. The primary purpose is to learn lessons from 

Sida’s experience from supporting institutional development in partner countries. This theme is also to 

contribute to an increased understanding of  institutions and institutional development, and of  the impli-

cations for development co-operation more broadly. It is to perform a learning function for Sida staff  at 

all levels and therefore adopts a process-oriented and participatory approach. As a first step, an orienta-

tion  and  overview  phase  was  conducted  in  close  co-operation  with  Sida’s  operative  departments  and 

embassies to set the stage for evaluation. This phase was completed in 2005 and a series of  reports and 

other documents were produced.

This utv Working Paper presents two of  the documents. The first one – the Thematic Paper – introduces 

and motivates the evaluation theme, and presents the central ideas behind it. The second document – the 

Conceptual  Paper  –  introduces  the  basic  concepts  and  a  perspective  on  institutions  and  institutional 

development. Both documents set the stage for the evaluation theme. They also serve as a point of  refer-

ence for reflection and dialogue, on issues concerning support for the development of  institutions among 

Sida staff  and its partners, as well as for subsequent evaluations.

Gun Eriksson Skoog 

Evaluation officer 

Sida/utv

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Art. no.: SIDA23418en

ISBN 91–586–8354–2

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Table of Contents

Supporting the Development of Institutions – Formal and Informal Rules:  

An Evaluation Theme ..............................................................................................................5

1 

Points of Departure ...................................................................................................5

2 

Purpose and Overall Evaluation Questions ..........................................................8

3 

Initial Phase and Present Paper .............................................................................9

4 

What an Institutional Perspective May Offer .....................................................10

5 

Potential Evaluation Issues and Topics ...............................................................12

5.1 

Overall Issues of  Special Interest

 ...........................................................................12

5.2 

Possible Evaluation Topics

 ....................................................................................13

References ..............................................................................................................................15

Institutions as Formal and Informal Rules, Institutional Development and  

Processes of Change: Basic Concepts .............................................................................19

1 

Institutions – Formal and Informal Rules ...........................................................19

1.1 

What Are Institutions and What do they Do?

 .........................................................19

1.2 

What Kinds of  Institutions are there?

 ....................................................................21

1.3 

How are Institutions Related?

 ...............................................................................23

2 

Institutional Development and Processes of Change ......................................25

2.1 

How are Institutions and Actors Related?

 ..............................................................25

2.2 

What is Institutional Change and Development?

 ....................................................25

2.3 

What are the Types of  Institutional Change?

 .........................................................26

2.4 

What are the Causes of  Institutional Change?

 ........................................................26

2.5 

What are the Processes of  Institutional Change?

 ....................................................28

2.5.1  Emergence and Change of  Informal Rules

 ..........................................................28

2.5.2  Effective Change in Formal Rules

 .....................................................................29

2.6 

What are the Characteristics of  Institutional Change?

 ............................................30

3 

Institutional Development and Development Co-operation ...........................33

References ..............................................................................................................................34

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