Livelihoods, institutions and the small farmer - Institutional Constraints to Small Farmer Development in Southern Africa - page 286

namely geography, integration, and institutions. On the basis of an innovative empirical
assessment involving the use of instrumental variables approach, they confirmed 'the
primacy of institutions' and showed that the quality of institutions is consistently a positive
and significant determinant of income levels (Rodrik and Subramanian, 2003). In his own
contribution to the debate, Acemoglu (2003) employed a historical approach to isolate all
but two 'candidates, namely geography and institutions, as the main reasons countries difer
in terms of the average incomes commanded by their citizens. Roe (2003) and Dorward et al.
(2005) focused attention on markets as institutions that contribute to economic development
through the facilitation of exchange and coordination functions in a market economy.
More recently, Van Huylenbroeck and Espinel (2007) have confirmed the importance of
institutions and governance structures for market access, drawing from African examples,
among others. It is indisputable that institutions matter. There is also hardly any doubt that
differences between countries in terms of growth experience have a lot to do with the quality
of the institutions that have emerged in response to new economic opportunities. With the
awarding of the 2009 Nobel Economics prizes to works in economic governance and two
of its most avid apostles in the persons of Elinor Ostrom and Oliver Williamson (Nobel
Memorial Prize in Economic Sciences, 2009), there is no question that the endorsement of
institutions and their role in economic development is universal.
12.3 How much is too much?
But, as with many other effective remedies, it is easy to build up dependence and this is
already happening in respect to the appeal to institutions to explain anything that poses
some confusion in the development context. Today, a number of analysts and commentators
on development have come to see a growing trend towards what is disparagingly termed
'institutional fundamentalism' which can be interpreted as a tendency to see the fingers of
'institutions' in every development 'pie' (Sachs, 2003; Rodrik, 2006; Bulte, 2008). But, as the
chapters in this topic show, there is a need to understand the speciic role of institutions in
any particular context and their multi-dimensional character and how they affect different
aspects of household and communal life, be it in social, economic, or political terms.
This chapter will re-visit the basic problem context and the justification for engaging in these
enquiries and then summarize the key results in respect to the effect of institutional factors
on the operations and development of the smallholder sector. The different dimensions
of these effects will be examined and discussed and indications of future directions of
institutional analysis of smallholder agriculture presented.
12.4 How big is the problem and where are we towards addressing it?
On the speciic question of the development challenges that this topic confronted, there
is no question that all relevant bodies and practitioners within the region and beyond