Institutional Diagnostic Project: Preamble

Summary

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

Institutions matter for growth and inclusive development. But despite increasing awareness of the importance of institutions in economic outcomes, there is little evidence on how positive institutional change can be achieved. The Economic Development and Institutions – EDI – research programme aims to fill this knowledge gap by working with some of the finest economic thinkers and social scientists across the globe.

The programme was launched in 2015 and concluded in 2022. It is made up of four parallel research activities: path-finding papers, institutional diagnostics, coordinated randomised control trials (RCTs), and case studies. The programme is funded by the UK Foreign and Commonwealth Development Office (FCDO). For more information, see http://edi.opml.co.uk.