A significant innovation of RECOLAND is the formulation of the theory on institutional credibility, and on its foundations, a methodology for decision-making in development, with particular reference to urban and regional planning, agrarian change, resource and environmental management, and structural readjustment policies.
Credibility theory predicts that when institutions persist in time and space they are functional, thus credible. If not, they would have changed or gone extinct. This principle holds regardless the form of institutions – private/public, formal/informal, and secure/insecure – and implies the necessity for caution and restraint when considering the design and establishment of new institutions.
The immediate relevance of the theory for the understanding of policy is its refocusing from institutional form towards function, and its methodology that helps identifying the policy options in accordance with the role that institutions perform in a time and space-dependent environment. This is particularly important in a poor, developing context, where land plays a crucial role in the provision of social welfare and security.
The methodology generally proceeds in two steps:
Id est functionality, of institutions and property rights. This can be done through three indicators:
- Actors’ perceptions of institutions, which can be operationalized through the FAT Framework. Hypothesis: the larger the divergence between actors’ perceptions of “institutions-in-use” versus “institutions-desired”, the lower the credibility.
- Actors’ perceptions of conflict, which can be operationalized through Conflict Analysis as measured through indicators including origin, frequency, nature, length, outcome, intensity, and timing. Hypothesis: the higher the level of perceived conflict, the lower the credibility. An example of its application can be found in Ho (2014).
- Speed of institutional change, which can be operationalized through an “Institutional Archaeology”, the meticulous description of institutions over time. An institutional archaeology over time makes use of “multi-angulation” of different sources, qualitative and quantitative; socio-economic, legal-political, and cultural. This can be depicted in the figure below. Hypothesis: the higher the relative speed of institutional change, the lower the credibility.
- For instance, when the credibility of institutions and property rights of informal settlements is perceived as high by social actors on the ground, the best policy option would be “non-intervention”. Likewise, when moving down on the credibility scale, one could also consider co-optation, or “formalizing that what is already done”. For more information, see the introduction by Ho (2016).
Currently the book “An Endogenous Theory of Property Rights” (edited by Peter Ho) is in the make. For further reading see the website of Routledge.
Prof. Peter Ho presents an introduction to the theory of Credibility, during a special session on the “Credibility of Informality” at the PLPR annual conference in Hong Kong, February 22, 2017.
Download presentation in format here: PLPR-panelintro2017 .