Institution-Building – Lessons from History
Nadeem Haque1997, Lahore Journal of Economics
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Abstract
In the post war world, numerous attempts at all levels-multinational, bilateral and domestic-have been made to foster growth and development in the low income world so that these countries can catch up with their richer brethren from the industrial countries. Why has growth not been faster? What can be done to make these countries achieve more balanced and sustainable growth? These are important questions of the day that are preoccupying all serious positive social science and development policymaking. To a large extent, many of the answers that are being derived relate to the failure of these countries to develop key institutions. Most practitioners and thinkers are now in agreement on this issue but remain perplexed at what is required to develop these institutions. The public sector's attempts at developing the institutions within its fold have not succeeded. The fostering of non-governmental institutions also remains fairly uneven in its results. Donor funding for institutional support too has had very limited results despite the extensive history of sectoral and institutional reform that has been supported by substantial financial and technical assistance and resources. One area that the practitioners and thinkers in the sphere of institution-building seem to be paying little attention to is the origins and development of more successful institutions in the world. Most of the institutions that command international respect are in the western industrial countries. These include the major universities such as Oxford, Cambridge, Harvard and Chicago, think tanks such as Brookings, Carnegie, Rand, court systems, stock exchanges and central banks etc. How were these established and how did they develop to the extent of gaining the respect of the society around them? What was their contribution to the society in which they were situated? These are important questions that may allow us to understand the difficulties with institution building in the low income countries. We examine the history of two major universities in the US to derive certain important implications for institution-building. Rockefeller, Harper and the University of Chicago The University of Chicago (U of C) offers us a wonderful opportunity to look at institutional development in modern times and at a rapid rate.
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