Streamlining Informal Institutions for Local Strategic Planning and Development in a Post-Socialist Central-European Setting.

AuthorSykora, Tomas
  1. Introduction

    The practice of local development and strategic planning consists of the two complementary dimensions that differentially contribute to the process and outcomes of planning. On the one hand, the codified norms, organizations, and instruments (hereinafter referred to as formal institutions) provide a degree of certainty for acknowledging strategic planning as an effective tool for moderating local development. On the other hand, there is a rather fluid dimension of cooperative social networks, trust, and other uncodified norms of acting (referred to as informal institutions), which are aimed to be supported and mobilized by strategic planning. In the latter dimension, however, the situation becomes more complicated, and the informal institutions are almost like an 'elephant in the room'. They are taken as ubiquitous and essential, but only scarcely are they subject to a detailed critical discussion among planners. Aside from using general references to informal institutions, their specific meanings, types, and variegated implications for strategic planning remain poorly discussed. We believe that these issues and question marks are even more perceptible in post-socialist European countries (PSECs), where planning practice is based on a generally weaker theoretical-methodological anchorage, and, at the same time, strategic planning continues to possess a strong emphasis on technocratic procedures and outcomes (Pascariu et al., 2021). This text aims to critically reflect on rather formalist references to informal institutions and to provide their working operationalization for local strategic planning and development in PSECs.

    1.1. Strategic planning and informal institutions

    Local strategic planning is intended to coordinate individual stakeholders and sectors in favor of a holistic future development, with each local community having different starting conditions, institutional capacities, and needs. Compared to statutory planning, strategic planning emphasizes transformative actions addressing long-term challenges, creating strategies, and mobilizing capacities for the management of spatial change (Healey, 1997; Albrechts, 2004). The concept of local development leads to reflections on how people perceive priorities in specific places and what they consider suitable for the development of their locality. Development is determined by socially different groups and interests in different places and at different times (Pike, Rodriguez-Pose and Tomaney, 2007). The specific goals of local development, therefore, always depend significantly on the configuration of local conditions and networks among stakeholders and the public. Mathie and Cunningham (2003) point out that it is important to pay attention to the position of the community concerning local institutions, on which (in addition to the external economic environment) its prosperity depends. Vazquez-Barquero (2002) emphasizes that local development governance involves a process of cooperation and coordination that integrates the strategies of public and private actors, their investment decisions, and mutual exchanges.

    Institutions and their political implications are increasingly seen as key factors in explaining the success or failure of (neo)endogenous development processes in a globalized world (Rodriguez-Pose, 2013; Vazquez-Barquero and Rodriguez-Cohard, 2016). Highlighting the role of strategic plans for local development and regeneration, the UN-Habitat Global Report on Human Settlements emphasizes that 'strategic spatial planning also has a crucial institutional dimension' (UN-Habitat, 2009, p. 61). Understanding and enhancing local institutions is therefore essential for the design and implementation of effective local development strategies. The good institutional set-up is understood as a precondition for the strategic planning process to enable improvement of the feasibility of the strategic goals (Healey, 1997; Hopkins, 2012).

    Along with formal institutions (codified norms and laws, organizations, and instruments), the institutional set-up involves a variety of informal institutions (uncodified and voluntary norms of acting, and standards of conduct) that are enforced by those who bear the costs of non-compliance (North, 1992). While formal institutions refer to proposed organizations that often arise from larger institutional arrangements, informal institutions refer to social networks based on individuals' communication contacts and are created by repeated interactions in the community, resulting in specific (informal) social capital. In this way, social capital may contribute to overcoming some limitations of formal institutions and mobilize agents and resources for local development (Escandon-Barbosa, Urbano-Pulido and Hurtado-Ayala, 2019).

    1.2. Rationale and research aims

    Despite the proclaimed importance of informal institutions in strategic planning, there has only been scarce attention paid to their conceptualization and operationalization within the concrete local strategic plans. According to Mauro, Pigliaru and Carmeci (2018), informal institutions play a major role in the success of current decentralization reforms. This notion addresses the importance of informal institutions in the process of strategic planning of local development. Decentralization reforms and how informal institutions support their achievement will, however, depend on the political and geographical context. In this paper, we specifically explore the operationalization of informal institutions in post-socialist European countries (PSECs) of Central and Eastern Europe. Some authors argue that the importance of informal institutions and personal networks and trust is even higher in those countries where formal institutions are weak (Escandon-Barbosa, Urbano-Pulido and Hurtado-Ayala, 2019), but the situation in PSECs is more nuanced for the following reasons. During the period of socialism, strategic planning was centralized, but local planning administration was still called upon to determine how the goals set by the central bureaucracy would be integrated into a municipal setting. After 1989, this system of operation was discontinued because most central governments delegated decisions on strategic planning and development to local authorities, whereas centralized strategies remained to provide only frameworks for local planning. However, this newly established multi-level strategic planning regime with strong decentralization has revealed several path-dependent limitations to strategic planning:

  2. too much emphasis on infrastructure interventions limited the focus on community development;

  3. strong orientation on results with a predominant focus on measuring the quantitative indicators;

  4. the concept of a municipality as an object (territory, target group, passive recipient of strategic planning and management) instead of an entity (community of people);

  5. the universalist use of methods and techniques in strategic planning that do not reflect the local contexts; and

  6. weakness of civil society and informal institutions that would allow for more deliberative local planning.

    The afore-listed limitations call for strengthening the accent placed on informal institutions in strategic planning and local development in PSECs. This impetus has been, however, only scarcely met by an in-depth discussion of different conceptualizations of informal institutions, or by their operationalization for local strategic planning and development. In this paper, we address these gaps and draw inspiration from the recent literature on informal institutions in strategic planning. Due to frequent theoretical arguments about the importance of informal institutions for strategic planning and development, we reflect on how informal institutions are presented in the academic literature. Our working hypothesis is that the lacking operationalization of informal institutions in PSECs planning practice results from their weak conceptualization in the planning literature; thus, supporting the continuing use of formal and more technocratic procedures and instruments. In the next sections, we briefly sum up the theoretical debate on the distinction between formal and informal institutions, and we use content analysis of the planning literature to identify the main ambiguities and gaps in integrating informal institutions in the strategic planning domain. Then, we introduce the general institutional arrangement of strategic planning in PSECs and adopt the concept of planning cultures to propose a preliminary typology and operationalization of informal institutions in PSECs. Finally, we outline the further steps allowing the proposed operational typology to enhance strategic planning goals, outputs, and their evaluation.

  7. Framing informal institutions

    Institutions are generally the rules of the game that regulate economic, social, and political relations in society. The frequently cited definition comes from Douglass C. North, who defines institutions as 'the humanly devised constraints that shape human interaction. In consequence they structure exchange incentives in human exchange, whether political, social or economic' (North, 1990, p. 3). In practice, it is essential to address both formal institutions (rules, laws, organizations, and instruments) and informal institutions (customs, traditions, social norms and values, interpersonal contacts, relationships, and informal networks, culture, religion, identity) that are necessary to build trust (Rodriguez-Pose, 2013). More varied notions and understandings of institutions can be distinguished by looking back on the development of institutionalism itself.

    Institutionalism flourished mainly during the 1920s and 1930s. The basis for institutional economics was laid by the American economist and sociologist Thorstein Veblen, who understood the economy as embedded and evolving within social institutions (Wawrosz, 2007). An...

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