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Professor argues for new approach to institutional development

| Wednesday, March 7, 2018

Yuen Yuen Ang, associate professor of political science at the University of Michigan, presented a lecture titled “A Hammer Is Not a Second-Best Screwdriver: Taking Institutional Fit Seriously in Development,” on Tuesday. Ang detailed the argument of her 2017 book, “How China Escaped the Poverty Trap,” focused on the case study of China, where modern institutions have spurred the country’s development despite being regarded as weak or backwards based on first world standards.

In recent years, Ang said, there has been a shift in the idea of institutional fit from the argument that “one-size-fits-all” countries to the adaptive “one-size-doesn’t-fit-all.” This modern, developed approach at looking at institutions is better than the old way but still has room for improvement, Ang said.

“I think it’s great; it’s very encouraging to see that we have made this big shift, but I have some complaints,” she said. “I think that the idea of institutional fit is used and evoked, but it hasn’t been taken seriously.”

The problem, Ang said, is that many theorists using this new approach to institutional fit are lacking theory, evidence and examples, and they often equate these poorer countries’ success with “second-best institutions.”

“If you can’t have something that is the best institutions, then make do with something less good,” Ang said.

In studying regional Chinese governments, as well as several other nations, Ang rejects this notion, arguing that there is historical evidence that alternative institutional systems — systems that are not necessarily inferior to the normative standard — can bring sweeping development.

Her case study centered around the idea that in order to understand institutional fit seriously, the way the topic is thought about and measured must be changed. Ang also said that she found evidence that institutions for building markets does not equal the same institutions for preserving markets and that even in early stages, these seemingly “weak” or “wrong” institutions can be functionally strong.

Ang said much of institutional ideology is surrounded by the chicken and egg conundrum of whether normatively weak institutions or economically poor countries came first. She agreed with contemporary authors who say it is difficult to make poor countries prosperous; however, China has provided insight into the feasibility of this objective.

“We have misunderstood that causal process of the government,” Ang said. “It’s not a two-step process; it’s not just one big arrow. We can synthesize development into a co–evolutionary process.”

The institutional steps Ang prescribes are for societies to harness these supposedly “weak” institutions in order to build markets, for emerging markets to stimulate strong institutions and for strong institutions to preserve markets.

“It is a simple, but not simplistic view of development,” Ang said.

 

 

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