Are institutions in developing economies doomed?



In late November 2015 academics, journalists, politicians and members of various civil society organizations from several countries that are characterized as emerging markets came together in Cape Town, South Africa to discuss the life-span of institutions, and whether they can be saved or defended under attack from authoritarian systems or otherwise changing conditions.

Participants who attended the event organized and sponsored by the Friedrich Naumann Foundation (FNF) hailed from Turkey, Mexico, Brazil, Argentina, India and South Africa: all underdeveloped markets most of which also struggle with issues of democracy, such as populist governments and sometimes not so subtle authoritarian tendencies. Several members of parliament from South Africa’s Democratic Alliance (DA) also participated in the discussion.

The birth, life and death of an institution

Turkey was represented by myself from P24, Berk Esen from Bilkent University’s international relations department; Zeynep Alemdar, head of Okan University’ international relations department, Economist Emre Deliveli and Aret Demirci from FNF Turkey.

The example shared by the Turkish delegates in the conference on the making of an institution was the creation of the Constitutional Court as a powerful institution, some of whose rulings have at times stopped governments from riding roughshod over constitutional provisions, but at the same time have started a tradition of shutting down Islamist, Kurdish and communist political parties.

To illustrate how an institution was destroyed, the Turkish team described the recent erosion of the influence of Turkey’s Central Bank through increasingly harsh and sometimes humiliating attacks and veiled threats aimed at undermining the credibility of its Governor, coming from Turkey’s powerful autocrat, Recep Tayyip Erdoğan.

The example the Turkish team chose to present as an example of how the media, under relentless attack from the government, is looking to defend itself through the rise of a higher-quality digital media as a replacement institution that can be a platform for dissent and a source of good journalism, hope and encouragement as well as jobs for journalists, intentionally chosen by the delegation to end the stories of Turkey’s institutions on a positive note.

How the other half lives

Participants from other countries also discussed the successes and failures of their own institutions.

The dismantling of an elite police force, which was initially established to fight corruption in South Africa was given as an example of how an institution was destroyed; the creation of the educational system in Mexico which eventually turned into a major apparatus for imposing official ideology was put forth as an example of how an institution was created. Other examples included, among others, the recent abolishment of India’s state planning agency; the creation of a civil society organization which became an effective voting monitor in Argentina; the creation of a region-specific new development plan in South Africa;  the devising of an urban development plan in Brazil to guarantee private property rights to all, and the establishment of a sound an independent judicial system also in Brazil.

As FNF is a foundation for liberal politics, the conference was essentially a meeting of liberals, who certainly represent an incredibly wide array of diverse beliefs about political systems and life from both ends of the political spectrum, but regardless of their differences, all participants agreed on one rather unweberian point: institutions are extremely hard to build, but they are fairly easy to destroy, come the right time and circumstances. Institutions often fall victims to the destructive actions of circumstances or other institutions they have helped create. They are like the trees in the Stereophonics song, which has the lyrics, It takes one tree to make a thousand matches but only takes one match to burn a thousand trees.

Doomed to failure, or not?

But why are institutions so easy to destroy? Are they failing us are we failing our institutions? This is a hugely important question for less developed markets with fledgling democracies.

How can we ensure that our good institutions remain strong and sound that so whatever it is that we need them for — be it fighting crime or corruption; ensuring checks and balances in our political systems; making sure that nobody goes hungry or that atrocities of the past don’t repeat in the future? The same question could be reversed: how can we fortify our good institutions, but at the same time have the flexibility to improve or get rid of the bad ones? Can we have the best of the both worlds? Or is it simply preferable to have fragile institutions, if that means that those working against us can also be easily brought down?

On the other hand, these questions are undoubtedly more relevant and vital in emerging markets. Some wealthy Western democracies have been able to do a good job of maintaining their well working institutions. But even in some of those countries, today we see that some institutions are beginning to crumble in the face of nearly a decade long economic crisis followed by the one of the greatest refugee crises in recent history. Populist parties — which are notorious for undermining good institutions– are coming to power even in nations where center left or right parties have historically held majorities.

Stories of different institutions from the world’s top six emerging markets suggest that not all institutions are perhaps doomed to fail, but they are all vulnerable, precisely because their destruction serves for the erosion of collective memory about the past. Turkey, which has seen every institution including its basic understanding of rule of law, which was never too strong in the first place, eroded, undermined, attacked or turned upside down in a little over a decade is burning proof of that.

Originally appeared at