Institutional Problem-Solving Versus Good Governance as Neoteric Paradigms for Development

Abstract

"Rapid political developments and technological change have, over the course of the past decade, changed the problem environment that large multilateral development agencies face in terms of serving the needs of the agents of their donor and recipient countries. These events have led to the recognition of the importance of the role of the State in a globally integrating economy. However, this new concern with 'Good Governance'— which seeks to enhance the capacity of the State to act in a more enlightened manner— continues to address itself in terms of the orthodox development paradigm. This paradigm, which emphasizes capital accumulation to reproduce in poor countries the features associated with the success of the rich ones, has been acknowledged as having not produced the theoretical results forecasted. The paper argues that successful adaptation to the new regime requires a new representation of the problem environment based on the paradigm of 'institutional problem solving.' This alternative breaks open the dichotomy between 'the State' and 'the People central to the orthodox model and instead looks at how structuring institutions to deal with collective action problems in their relevant contexts will lead to the endogenous generation of those characteristics that the Good Governance approach superficially and in piecemeal fashion essays to recreate."