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Institutions matter for growth and inclusive development. Despite increasing awareness of the importance of institutions for economic development there is little evidence on how positive institutional change can be achieved. The Economic Development and Institutions (EDI) research programme aims to fill this knowledge gap by working with some of the world’s leading economic thinkers and social scientists. The programme was launched in 2015 and will run for five years. It is made up of four parallel research activities:

RA1: path-finding papers;
RA2: institutional diagnostic tool;
RA3: linked randomised control trials and;
RA4: case studies.

Underpinning these research areas is a policy engagement workstream, aiming at facilitating a demand-led research agenda. The programme is generously funded by the UK’s Department for International Development (DFID).

Path Finding Papers

Under this research area EDI commissioned 23  path-finding papers , which synthesise the existing evidence on a range of relevant topics for the benefit of researchers and decision-makers and identify  knowledge gaps that could provide the focus for an emerging research agenda that EDI will tackle from the second year of the research programme. Find all the path-finding papers under publications here.

Institutional Diagnostic Tool

The objective of the RA2 research activity is to design an “institutional diagnostic” tool that will permit policy-makers to identify weak institutional areas that constrain development and appropriate directions for reform. The “institutional diagnostic” tool follows the same logic as the “growth diagnostic” tools developed by Hausmann, Rodrik and Velasco,  but should go beyond it by focusing on the institutional weaknesses possibly responsible for binding economic constraints.  In this research endeavour, “institutions” are broadly defined as the “formal or informal rules of the game expected to be followed, individually and collectively, by political, social and economic actors”. As such, they touch upon a variety of areas - political, judicial, economic, cultural, religious, etc.

Linked Randomised Control Trials

This research area looks at the pressing need to improve the responsiveness and functionality of public and private institutions, which has motivated numerous governments and donors to actively support governance-promoting activities -- from citizen information campaigns, to bureaucrat incentives and enhanced personnel policies. Many of these investments are producing gains for citizens in need of effective state services and economic opportunities. However, far too few of these initiatives have been linked to rigorous evaluations that allow stakeholders to identify what specifically is effective and show how a model might be replicated or improved. Moreover, few of the evaluations that do exist have been designed to generate conclusions beyond the specific contexts within which they were implemented. The information collected through these RCTs will be used to support the design of policies that will promote development-related goals in a more efficient and effective manner, which is why all research under this area is conducted in partnership with government or public institutions.

Case Studies: Interaction between formal and informal instititutions

The objective of this research activity will be the implementation of a set of coordinated case studies aimed at investigating the complexities of interaction between institutions, and in particular the relationship between formal and informal institutions. These case studies will build on a new theoretical framework for understanding the relationship between ‘formal’ and ‘informal’ institutions, and will facilitate a comparative perspective on processes of sudden and gradual institutional change.

Policy Engagement

EDI aspires to have impact on the lives of people in the countries they are working in. Policy engagement – which means participating effectively in the policy-making process – is critical to achieving this impact. The Policy Engagement activities on EDI aim to create a demand-led research agenda which is highly applicable and policy relevant.