The use of the term institution has become widespread in the social sciences in recent years, reflecting the growth in institutional economics and the use of the institution concept in several other disciplines, including philosophy, sociology, politics, and geography. The term has a long history of usage in the social sciences, dating back at least to Giambattista Vico in his Scienza Nuova of 1725. However, even today, there is no unanimity in the definition of this concept. Furthermore, endless disputes over the definitions of key terms such as institution and organisation have led some writers to give up matters of definition and to propose getting down somehow to practical matters instead. But it is not possible to carry out any empirical or theoretical analysis of how institutions or organisations work without having some adequate conception of what an institution or an organisation is. Potentially consensual definitions of these terms are possible, once a few obstacles and difficulties are overcome in the way.
It is important to avoid some biases in the study of institutions, where institutions and characteristics of a particular type are over-generalised. In Bangladesh, institutions are mostly conceptually over-generalised and undefined scope of work remained a major obstacle in their smooth and purposeful functioning. Institutions are mostly treated by the bureaucracy either to expand authority or to override authority.
Institutions, institutional change and economic performance are inter-related and perhaps interdependent in the functioning of governance which needs to make policy options for institutional transitions and strategic choices.
"How do organisations make strategic choices during the time of fundamental institutional transitions such as those sweeping numerous emerging economies? To answer this question, a two-phase model of institutional transitions, one is the longitudinal process to move from a relationship-based, personalised transaction structure calling for a network-centred strategy to a rule-based; and the other impersonal exchange regime suggesting a market-centred strategy to identify the points of inflection; predict strategic choices for incumbent, entrepreneurial, and foreign firms; and delineate their performance implications." "How do organisations make strategic choices during the time of fundamental and comprehensive institutional transitions? In three decades of research since the publication of Child's (1972) seminal paper, researchers have produced an impressive body of knowledge on how strategic choices are made (Child, 1997; Oliver, 1991). However, most of their studies focus on strategic choices in relatively stable institutional environments. Even when scholars study how organisations respond to institutional transitions, they typically concentrate on changes in one industry while the overall institutional framework of the country remains mostly unchanged. Such industry-specific changes, however, pale in comparison with the massive institutional transitions taking place in many emerging economies. Unfortunately, little is known about how organisations make strategic choices". (Mike B. Peng, Academy of Management Review).
Bangladesh in many ways is an unconventional country, where traditional discipline prescribed by organised sciences are absent and partial and peripheral values form substantive basis for the policy decisions; and yet outcome in terms of economic growth social advancements are very impressive. However, sustainability in maintaining growth and such social advancement may not be attainable as institutional structures are left unattended and perhaps not allowed to function.
Primarily political institutions in Bangladesh are not well defined and in most cases not allowed to function. The constitution itself is full of contradictions and fundamentals are periodically amended to meet the narrow and short-term objectives which have raised serious doubts about the integrity and intentions of the political leadership.
Administrative institutions are ineffective and at local level, it only gives confusing signals that have pitted elected representatives against the administrative officials. The paradox is compounded by unconstitutional intervention by the Members of Parliament (MPs) in the affairs of the local government bodies. This puts citizens at the lowest echelon of decision making and forbids them from participating in governance.
In a country like Bangladesh, rural activities are the main driver for development and due to ineffectiveness of the local institutions, economic activities fail to gather momentum and the vast majority of the rural population remain under-employed or unemployed. Productivity suffers from the constraints of logistical support, economic planning and unachievable targets. Both natural and human resources are wasted by this and disgruntled minds will then divert to violence, sycophancy or anarchy that causes damage to homogeneity of society.
Parliament lacks tradition and with the little experience it has gained, it is unable to act judiciously and for the common cause of governance. In the absence of tradition, personality cult has developed and MPs are only rewarded on loyalty-tests rather than competence. Incompetent cronies surround the leadership and use their sycophancy to make personal gain.
In advanced countries, whatever may the difficulties and disruption caused by both political polarisation and natural disaster, institutions function to correct the course to bring normalcy. Perception on individual rights, his/her capacity, competence, social status will not be taken into any consideration to compromise ongoing functioning of society or to abort continuity of governance. This is ensured by well-defined and functioning institutions, particularly at local levels.
Apart from parliament, the judiciary as an arbiter needs to remain unshaken and remains free from any influence and prejudice. Justice as dispensed at the local level is important for formulating laws at the national level. The judiciary perhaps is the best institution to reflect the values of society and best placed to articulate the concern for common cause, which may come under threat by administrative override. Judiciary must form the accumulative goodness of the citizens of all shades and creeds and protect traditions of a society to ensure functioning of all citizens and their continuity. The judiciary will fail only when it is alienated from common cause and from common tradition in preference to selected causes and selected interests.
In the spheres of commerce, business and management, Bangladesh has paradoxically made progress without any foot-print. This is mainly due to lack of time, resources and politically inept leadership. Within a span of 40 years, it is indeed difficult to build an efficient business organisation to compete and survive in the competitive globalised market. In addition, skill and technology were not home growing to support local investments.
Business organisations tended to evolve around personality cult and revolved within the immediate fraternity of families rather than expertise. This, however, has given a short-term but badly needed boost in the economy, which may become difficult to sustain on the long term against other emerging nations.
Finally, institutions which are developed out of geopolitical compulsions as regional and sub-regional cooperation need to be attended to very effectively, creating greater opportunities for economic expansion.
Citizens, political leaders, parliament, local institutions, administrative agencies and, above all, the judiciary must form an alliance and collaborate with each other for establishing a common cause to achieve a common goal and to set the nation on the correct path of our claimed advancement.
kbahmed1@gmail.com
Institutions and strategic choices for economic performance
K.B. Ahmed | Published: January 30, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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