Growing Institutions? Grow the People!
IMF Blog, August 10, 2012
Source details
- Canonical URL
- Growing Institutions? Grow the People!
Other formats
Bibliographic details
- Authors: Sharmini Coorey
- Published: August 10, 2012
Institutions depend on people
- Quote: “When you speak about institutions, in fact, you are speaking about the people.” — Gani Gergüri.
- Core argument: Without sound institutions it is very hard to achieve sustainable economic growth; the quality of institutions hinges on the quality of the people running them—their educational background, training, business culture, and policymaking approach.
- Theoretical foundation: Draws on Douglass North and the new institutional economics; references Acemoglu and Robinson’s thesis in Why Nations Fail that differences in deep institutions (formal and informal rules of economic, political, and social interactions) explain sustained differences in economic performance.
- Inclusive vs extractive institutions: Inclusive economic and political institutions are essential for avoiding stagnation and supporting a dynamic process of constant innovation and Schumpeterian creative destruction.
Relevance to recent crises and advanced countries
- Eurozone crisis lesson: Weaknesses in national macroeconomic and statistical institutions in supposedly “advanced” countries were at the root of the crisis, especially in Greece.
- European-level institutions: Lack of supportive fiscal and regulatory institutions at the European level—and the political integration required for them—contributes to markets’ continued anxiety about the common European currency.
IMF actions on capacity development
- Institutional response: The IMF created a new Institute for Capacity Development to take a holistic view of capacity development work and to develop an IMF-wide strategy for capacity development.
- Scope: The IMF seeks to help its 188 member countries train skilled professionals and build institutions accountable for delivering public goods such as a stable currency, efficient tax collection, and trustworthy data.
The Joint Vienna Institute (JVI) experience and lessons
- Milestones:
- Conference in Vienna marked the 20th anniversary of the Joint Vienna Institute.
- The JVI was created in 1992, three years after the fall of the Berlin wall.
- Reach and impact:
- For the past two decades, close to 30,000 officials at all levels of seniority have received some form of training in applied economics and finance at the JVI.
- Conference convened more than 140 policymakers and academics to discuss lessons from the global economic crisis and regional challenges.
- Alumni testimony: Governor Gergüri recalled a personal JVI experience: “It was my first time going outside the country... It was exactly ten years ago here in Vienna, in this very melodious city. I came here, had the three-week course in monetary and financial statistics. I was flooded with enthusiasm because I was opening a small window for big opportunities―for my institution, and then this is the way I started in fact to build also my career.”
Toward a new approach to training and capacity development
- Need for tailoring:
- Priorities for training depend on countries’ levels of economic development, EU or regional integration status, and individual circumstances.
- Heterogeneity requires more tailored approaches and closer integration of training with national capacity development strategies.
- Linking individual skills to organizational capacity:
- Move beyond measuring improvements in individual skills to assessing impact on the capacity of units and organizations to perform functions.
- Make training and technical assistance more demand-driven and monitor how well organizations utilize trained people.
- Exploit synergies between technical assistance and training.
- E-learning and outreach:
- Urgent need to harness the potential of e-learning to reach officials who cannot travel to Washington or regional centers and to help officials better prepare for courses.
- Web-based tools could help explain the IMF’s purposes and policies to a broader public, including civil society.
- Informal and peer-to-peer learning:
- Value of learning outside formal courses in small, informal, high-level peer-to-peer meetings.
- Explore JVI and IMF training centers as nodes in a broader network offering flexible, customized seminars beyond standard two-week courses.
- Broader engagement:
- Enhance outreach to civil society, journalists, parliamentarians, students, and the public at large.
- Incorporate non-traditional thinking:
- Crisis has forced reconsideration of economic doctrine and policies; textbooks on macroeconomic stabilization, growth models, and financial supervision are being rewritten.
- Continue and systematize inclusion of alternative and emerging non-conventional views in training programs.
Policy implications and recommendations
- Invest in people: Prioritize building human capital (education, training, professional development) as the foundation for stronger institutions.
- Develop IMF-wide capacity strategy: Implement a holistic, IMF-wide strategy for capacity development through the Institute for Capacity Development.
- Make training impact-oriented: Evaluate training by organizational and institutional outcomes, not just individual skills.
- Scale through technology: Accelerate adoption of e-learning and web-based tools to expand reach and effectiveness.
- Strengthen coordination: Improve coordination between technical assistance and training and integrate training into national capacity strategies.
- Foster flexible and peer-based learning: Expand flexible, customized seminars and peer-to-peer exchanges beyond traditional course formats.
- Broaden audiences: Enhance outreach to civil society and other non-traditional stakeholders to build broader understanding and support for institutional reforms.
- Integrate pluralistic thinking: Systematically include alternative economic perspectives and emerging ideas in curricula.
Source: Growing Institutions? Grow the People!, Sharmini Coorey, August 10, 2012.
Content in this bundle
- Root Causes - Finance & Development - June 2003 - Daron Acemoglu
- The Primacy of Institutions
- Breacher of the peace