Interaction of formal and informal institutions
While formal state institutions may be weak or deemed illegitimate in fragile and conflict-affected contexts, there are often informal institutions that persist and retain legitimacy. These institutions are diverse and may include community mechanisms or customary local governance institutions. Often, they fulfil some of the functions expected of the state.
Statebuilding initiatives have often focused primarily on formal institutions and their capacities at the central level, sidelining sub-state and informal institutions. This has prevented the evolution of an organic process of reform driven by local actors that could allow for greater resonance and legitimacy with citizens.
There is a growing awareness of a need to pay attention to existing informal institutions. This may stem from pragmatic acceptance of their existence; a recognition that they represent local culture and practice; and/or the view that they can provide a bridge between state and society. Informal institutions may improve public service delivery; help stimulate investment; facilitate the transition to more inclusive, rules-based governance; and promote social reconciliation in situations of conflict.
In some cases, informal local governance institutions can work synergistically with formal institutions. In other cases, however, they may compete with formal institutions in negative ways and undermine them, particularly in the case of patronage networks. Critics view such informal institutions as undermining norms of governance and citizenship. Further, local and informal institutions may not necessarily function better than the state and can in some cases be discriminatory, particularly towards women and youth. Working with informal actors does not necessarily mean endorsement though if donors can engage in dialogue with them with a view to securing inclusive rights.
The key to adopting an institutionally diverse approach in statebuilding and peacebuilding processes is to avoid competition between informal and formal state institutions. It is important to understand the conditions in which they can be beneficially linked.