Institutional Theories and International Development

Abstract

A recent trend in international development circles is ‘New Institutionalism’. In a slogan, the idea is just that good institutions matter. The slogan itself is so innocuous as to be hardly worth comment. But the push to improve institutional quality has the potential to have a much less innocuous impact on aid efforts and other aspects of international development. This paper provides a critical introduction to some of the literature on institutional quality. It looks, in particular, at an argument for the conclusion that making aid conditional on good institutional quality will promote development by reducing poverty. This paper suggests that there is little theoretical or empirical evidence that this kind of conditionality is good for the poor.