Institutions: A Non-Quantitative Explication

Abstract

In this paper, the meaning and nature of institutions in the economic literature are examined critically with a particular interest on its relevance to the development process of Nigeria. It suggests that the uncritical use of institution-based definitions and context-based concepts mainly from the Western world may not adequately reflect the history, socio-economic, political and cultural context in which institutions develop in Nigeria. The study, therefore, highlights the need for context specific meaning of institutions, which takes into account the peculiar nature and problem of the Nigerian economy. It also looks at the key typologies and categorisations of institutions, the indicators widely used for judging institutional quality and the conceptual difference between institutions and organisations. The paper does so by introducing these distinctions, which help to grant a more nuanced view of the interaction between formal rules, informal norms, governance arrangements, and institutional structures in creating institutional effectiveness and development outcomes in Nigeria.