Institutions as Meso-factors of Development: A Human Development Perspective

Abstract

This study borrows from Amartya Sen’s capability approach in order to enrich the analytical tools with which to study the institutions and development link. By expanding on the theoretical notion of contextual conversion factors, I elaborate a conceptual framework with which it is possible to identify the channels through which institutions can affect development. I follow the human development paradigm for the conceptualization of development and visualize institutions as features that characterize the context within which the life of individuals is embedded. In the attempt to refrain from a onesize-fits-all logic, I concentrate on the study of institutions at a level lying in between the country (macro) and the individual (micro). Therefore, I refer to the meso level for the analysis of institutions, which implies that the framework is adequate for studying institutions at a subnational level. This study attempts to contribute to the understanding of the institutions-development link through (i) the analytical framework proposed, (ii) an extension to commonly referred-to definitions of institutions and (iii) an accurate literature review that combines approaches of development economics and of institutional analysis. A meso approach to the study of institutions is thought to contribute to a better understanding of complementarities between local state capacity and macro-level policies and to the role that institutions can play in decreasing within-country poverty and inequality.