Case study overview

In its first year of operation, INFORM researchers have produced five case studies on informal practices in four domains: politics, economics, interaction between the public and institutions, and regulation of interpersonal relationships.

In the political sphere, our electoral practices case study examines practices ranging from ones that can be described as instances of corruption (vote buying and party feudalisation of public offices) to informal distribution of benefits (funding of projects and issuing of licences in the periods just before and after elections). The range of activities involved suggests that strengthened legislation and enforce- ment regarding corruption is not likely to be a sufficient measure to address a wider concern: that the concentration of both political and economic power in the hands of political parties enables them to prioritise loyalty, connections and acquaintance over merit-based decision-making. In some measure, clientelistic practices can be described as inherited from previously existing single-party systems, with the crucial distinction that in a multiple-party system there are multiple paths to the privatisation of public be- nefit, with these paths sometimes competing with one another.

The case study on “leadership meetings” highlights instances in which on issues of high political conflict, party leaders frequently resort to circumventing the legal institutions of decision-making and work out compromises through private agreements, many of them reached in environments such as restaurants. This informal practice, frequently encouraged by US and EU diplomats, trades the short-term benefit of resolving a pressing issue for the longterm marginalisation of formal institutions designed to guarantee debate and public participation.

overview

overview

In the economic sphere, our researchers sought to quantify the cost of informal means of maintaining business relationships and relationships of utility with employees of public institutions. INFORM researchers in nearly every country of their study encountered businesspeople who regarded the cultivation of informal relationships as an economic necessity. The economic cost of the lunches, coffees, gifts and other exchanges of value involved, if viewed as transaction costs, are considerable in all cases. They are relatively greater, however, and more likely to be paid out of pocket, by younger and less established entrepreneurs, particularly those working in newer and smaller firms. In that regard, the transaction cost of network maintenance can act as a barrier to economic activity. There is a nearly universal preference among businesspeople for formal regulatory systems that would be reliable, predictable, and uniformly efficient. Crucially, the evidence in this case study suggests that informality as a representation of some imputed “Balkan sociability” is probably more of a stereotype than a viable explanation, and that much of the time and money invested in what appears to be sociability by businesspeople is in fact problem-solving activity.

In the area of interaction between the public and institutions, INFORM researchers examined the role that migrant and returnee communities play in the political and economic life of their home states. While many returnees return accustomed to the more formally and transparently regulated systems dominant in their sites of emigration, all of them rely on informal networks of acquaintance and kinship to establish their role and presence in their countries of origin. An instructive illustration of productive interaction between formal and informal levels comes from the enterprise opened by an émigré taxi dispatcher in Banja Luka. Performing call-centre and online work for the taxi industry in Sweden, a formal business has succeeded in establishing an informal base of operation from which it is possible both to diffuse “Western” practices and assist in the reintegration of a local minority subject to widespread political and social discrimination. The examples suggest that positive substantive contributions can be made possible when formal and informal institutions exist in a harmonious relation to one another.

INFORM researchers approached the field of regulation of interpersonal relationships through the lens of home production of meat, an informal practice that is both a means of compensation for material need and deeply inscribed with traditional, religious, and communal meaning. This practice is strongly discouraged by EU health and agricultural frameworks, but the case study finds a high level of partiality and selectivity in the enforcement of restrictions. Some of the gaps between formal rules and informal practices, especially in relation to the humane treatment of animals, derive more from constraints on resources than on attitudes. The research also indicates a pattern by which states willingly adopt restrictive rules, sometimes exceeding what is required by the EU, then compensate for any anticipated difficulty through lax enforcement. The voluntary character of this accommodation indicates a gap between formality and informality that can potentially be filled by capriciousness and corruption. In that sense, the evidence from home meat production proceeds from a small problem to a major need: to harmonise formal rules with practices on the ground.

Subversive institutions” appear to present the greatest danger in the fields of politics and economics, while in other fields of social life INFORM has found considerable evidence of complementary and substitutive institutions. The distinct dynamics at work in different spheres of social life indicate a rich ground for formulating strategies to bridge damaging gaps, and to suggest ways of bringing the formal and informal spheres into more productive harmony with one another.

Eric Gordy INFORM Project coordinator, UCL SSEES

The complete Newsletter #1 is available on the following link:

First INFORM Newsletter

Read more about the project:

“INFORM: Closing the gap between formal and informal institutions in the Balkans “