In order to theorise the roles of institutions in development, it is important to define development first. In this post, I argue that Amartya Sen’s “development as freedom” is the most suitable framework for theorising institutions & development.
Amartya Sen has made a powerful argument for looking at development as a process of enhancing substantive freedoms (e.g. freedom from hunger, illiteracy, morbidity, etc.). This is best encapsulated in his book Development as freedom. Sen argues that freedoms have an intrinsic and instrumental importance and that human agency is the key to the pursuit of development. All three ideas have a direct bearing on institutions.
Impact of institutions on freedoms
Recently I argued that institutions should not be seen as constraining human interactions, but as structuring human actions. By constraining and enabling people’s freedoms, institutions have a direct bearing on development. For example, an institution like bonded labour prevents a labourer from participating in the labour market – thus restricting her freedom. Jim Crow laws prohibited African Americans and White Americans from doing a variety of things including marriage, education, employment, and other significant things. Removing these constraints is an important task of development – and this is achieved through institutional change.
Secondly, institutions have an enabling role. Freedom from illiteracy, morbidity, violence, and other important goals need institutional structures for their realisation. Understanding development in terms of freedoms gives us functional guidance for creating institutions that can achieve these goals.
Ultimately Sen puts the onus of development on human agency. He understands that human agency operates in a social context, an addressing the context is crucial to releasing/enabling agency. Since institutions can be used to characterise the social context, this conceptualisation gives us a window to integrate thinking about institutions and development. In other words, one of the main tasks is to redesign institutions by removing constraints on people’s agency as far as possible, and by enabling substantive goals that we collectively prioritise.
This perspective gives us an important norm to evaluate institutions. As a thumb rule we can ask if everyone has the freedom to participate in the institution that is being considered. From markets to marriages to politics, any institution that regulates these should enable greatest freedoms for people for it to be a ‘good institution’.
Impact of freedoms on institutions
Another important concept in the framework is that people use freedoms they have to pursue other freedoms that they value. This points out how institutional change can be affected by human agency. Simple as it looks, this has powerful implications. The implication of freedom of association, expression, information, literacy, and mobility for political and social change needs no explanation. The fundamental insight Sen brings in here is that we may not be able to say a priori (by theorising or philosophy) which institutions are most suitable for our purposes. But human reasoning and agency is capable of accounting for the context and the goals that are collectively prioritised and bring about institutional change. It is by removing restrictions on agency and by facilitating people’s abilities we create the best possible context for institutional change that will be conducive to development.
The two features described above have far-reaching implications for theorising the role of institutions in development. Most importantly, Sen’s framework enables us to borrow concepts widely from sociology political science, critical theories, and other areas of social sciences. I will briefly indicate this possibility here. Sen argues that human agency is critical to development and that agency is circumscribed by the social context. This creates an opening for us to discuss class, caste, gender, and other forms of social relations and their implications for human agency. This also creates a room to discuss power relations. Distribution of power its regulation have been discussed widely in political theories and philosophy. Feminism draws attention to how women’s lives are circumscribed by rules that are against interests of women. Social movement theories deal with how formal and informal rules of the game change through collective action with the purpose of increasing human freedoms.
As you can see, the possibilities thrown open by Sen’s framework to understand roles of institutions in development are enormous. I have indicated some possibilities here. In the future, I will elaborate these by pointing out theoretical possibilities and also by illustrating these with examples.