SOAS Research Online

Abstract

The role of institutions in Asian development has been intensely contested since Gunnar Myrdal’s Asian Drama, with later contributions from institutional economics and developmental state theory. Despite much progress, the dominant approaches do not agree about the institutions that matter, nor do they explain why similar institutions delivered such different results across countries. Cultural norms and informal institutions clearly matter but the appropriate norms did not already exist in successful countries; they evolved over time. The distribution of holding power across different types of organizations, the ‘political settlement’, can explain the diversity of experiences better and help to develop more effective policy. This chapter outlines Myrdal’s contribution to institutional analysis and how modern institutional analysis has built on his analysis, then, drawing on the experiences of Asian countries, sets out an alternative institutional analysis based on political settlements, and the implications for the analysis of the effectiveness of institutions.