Why integrating informal institutions in local governance matters

18 August 2016

There are many ways through which public authority is exercised by other actors than the state. Policies, just like politics, are often influenced by non-state actors and networks who do so through informal institutions. New research by Shandana Khan Mohmand and Snezana Misic Mihajlovic expands our understanding of how informal institutions work and how this can impact on local governance in surprising ways.

Image of Stari Most (Old Bridge), Bosnia and Hertegovia

Previous research has emphasised the fact that informal institutions matter because of the key roles they play in shaping citizen engagement with the state. However, there is still a lack of understanding of how informal institutions work and their impact on policy processes.

Do these informal institutions undermine or support the work of the state? Informal institutions have often been conceptualised as competing institutions that only play a role in the absence of an effective state. Yet in many cases, it is simplistic to view informal institutions as governance problems, as they often hold the potential to be governance solutions.

New research by Shandana Khan Mohmand and Snezana Misic Mihajlovic, funded by SDC's Democratisation, Decentralisation, and Local Governance (DDLG) network, demonstrates that governance can actually be strengthened by the inclusion of informal institutions in local governance processes. By examining the case of the Mjesna Zajednica (MZs) in Bosnia and Herzegovina, the study shows the ways in which informal institutions can act to fill a gap and work with states for improved governance, whilst also highlighting the challenges.

How informal institutions impact on local governance

MZs are village - or neighbourhood-level - institutions that regulate the community and therefore operate as semi-formal local governance institutions in Bosnia and Herzegovina. They provide a distinctive case for analysis across the country’s two entities: they have legal status as formal sub-municipal actors of local governance in the Federation of Bosnia and Herzegovina (FBiH), but do not have formal status in the Republika Srpska (RS).This provides a unique opportunity to research how the same institution operates within two different institutional frameworks, and how this affects local governance.

Comparison of the MZs in FBiH, where they are included within the formal governance structure, with the RS, where they are not, offers some interesting findings:

  • Citizen participation: Citizens in FBiH are more likely to access their local government through MZs than citizens in RS. This shows that informal institutions can play a greater role in connecting government and citizens when they are included within the formal governance structure.
  • Service provision: Water provision was found to be more satisfactory in FBiH and rural areas. The MZs appear to assist in providing water services where the state provision is lacking, especially in rural areas where there is less state presence.
  • Political Representation: MZs also appear to play a consistent role in political representation, and this is stronger in areas where formal representatives are not present.

States and informal institutions can work together to bring government closer to the people

Shandana Khan Mohmand’s previous research on Informal Local Governance Institutions highlights that it is often challenging for informal institutions to be effectively incorporated into the formal structure of governance. In some cases this integration can undermine the legitimacy of the informal institutions that have played such an influential role outside of the state.

The interesting thing about the case of the MZs is that informal institutions appear to have been effectively incorporated into the realm of the formal state. The fact that the MZs can support service delivery and citizen engagement more effectively in FBiH shows that integrating them into the formal governance framework puts them in a better position to reinforce the state’s desired governance outcomes.

The case of the MZs shows that as well as supplementing government roles, informal institutions can support government by bringing it closer to the people through intermediation and info-mediation. The MZs play a key role in helping citizens to access their local government, which shapes citizen interaction with the state. They are also key sources of information on government processes and public service delivery for citizens.

Therefore, there are incentives for states to work with informal institutions for the improvement of local governance.

Limitations on the relationship between informal institutions and the state

There are still large challenges to this in practice. Despite the ways in which informal institutions in Bosnia and Herzegovina complement the work of the state, the relationship is still ambiguous. Competition for claims of representation and authority in the community adds an underlying tension to the relationship.

The MZs in Bosnia and Herzegovina provide an example of how informal institutions can complement the work of the state, but how there are still challenges to ensure that competition between state and informal institutions does not undermine effective governance.

What does this mean for governance?

This research adds further evidence that we need to take a less narrow view of how citizens interact with their governments. When attempting to increase citizen engagement, we should consider the range of informal channels through which citizens can engage with the state.

It is not only important that we understand informal institutions, but that we consider how they could be integrated into formal structures to improve governance. The capacity for this integration of course depends on the political context and the nature of the institutions, which is why it is important to continue researching the variety of complex ways in which informal institutions operate.

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