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NEGOTIATING TRADITION, POWER and FRAGILITY in AFGHANISTAN Institutional Innovation and Change in Value Chain Development

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NEGOTIATING TRADITION, POWER and FRAGILITY in AFGHANISTAN Institutional Innovation and Change in Value Chain Development Institutional Innovation and Change in Value Chain Development Holly A. Chain Development Ritchie and Change in Value Institutional Innovation Negotiating Tradition, Power and Fragility in Afghanistan Institutional Innovation and Change in Value Chain Development Holly A. Ritchie 198003-os-Ritchie.indd 1 23-8-13 12:07 ISBN 978-94-91478-16-1 © Holly Alexandra Ritchie 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the author. Printed in The Netherlands. NEGOTIATING TRADITION, POWER AND FRAGILITY IN AFGHANISTAN Institutional Innovation and Change in Value Chain Development OMGAAN MET TRADITIE, MACHT EN KWETSBAARHEID IN AFGHANISTAN Institutionele innovatie en verandering in de waardeketenontwikkeling Thesis to obtain the degree of Doctor from the Erasmus University Rotterdam by command of the Rector Magnificus Professor dr H.G. Schmidt and in accordance with the decision of the Doctorate Board The public defence shall be held on 26 September 2013 at 10.00 hrs by Holly Alexandra Ritchie born in Torquay, United Kingdom Doctoral Committee Promotores Prof.dr. A.H.J. Helmsing Prof.dr. P. Knorringa Other Members Prof.dr. I.S.A. Baud, University of Amsterdam Prof.dr. D.J.M. Hilhorst, Wageningen University Prof.dr. I.P van Staveren Contents List of Tables, Figures and Appendices xi Acronyms and terminology xiii Acknowledgements xvi Abstract xx Samenvatting xxi Map of Afghanistan and location of case studies xxiii Preface xxiv 1 EXPLORING INSTITUTIONAL COMPLEXITY IN A LESS FORMAL CONTEXT 1 1.1 Institutions and institutional processes 1 1.1.1 What do we mean by institutions? 2 1.1.2 Exploring institutional complexity in a fragile context 3 1.2 Research framework 5 1.2.1 A critical realist lens with tools from development studies 5 1.2.2 Guiding research questions and themes 10 1.3 Research approach and methods 15 1.3.1 Case study logic and rigour 16 1.3.2 Reflections on research process and techniques 18 1.4 Introduction to cases 22 1.4.1 Case 1: Women’s Rural Food Processing Association 23 1.4.2 Case 2: Women’s Rural Vegetable Production Business 26 1.4.3 Case 3: Women’s Urban Electronics Business 30 1.5 Concluding remarks and thesis structure 33 Notes 35 v vi INSTITUTIONAL INNOVATION AND CHANGE IN VALUE CHAIN DEVELOPMENT IN AFGHANISTAN 2 THE UBIQUITY OF INSTITUTIONS: SHAPING ECONOMIC DEVELOPMENT 37 2.1 Towards a paradigm shift in theories of institutional change 37 2.1.1 Institutional development driven by efficiency and rational choice 39 2.1.2 Beyond rationality: the influence of history, culture and power 41 2.1.3 An evolutionary approach to institutional development 48 2.1.4 Incorporating social structure and embeddedness 51 2.1.5 Towards an appreciation of the interaction of structure and agency 56 2.2 Exploring actors and networks 59 2.2.1 Catalysing change? Entrepreneurs and innovation 60 2.2.2 ‘Institutional entrepreneurs’, power and strategic agency 62 2.2.3 Institutional activity in networks 65 2.3 ‘Bundles of institutions’ in informal developing economies 68 2.3.1 Dominance of informal institutions and power asymmetries 69 2.3.2 Trust: an outcome and an antecedent of economic activity 71 2.4 Concluding remarks 73 3 AFGHANISTAN: PERSISTING INSTABILITY, INFORMALITY AND TRADITION 75 3.1 A weak state and complex people 75 3.1.1 Resilience and adaptability in the face of uncertainty 77 3.1.2 Diverse tribes and elaborate social organisation 79 3.1.3 Migration and transnational links shaping livelihoods and trade 82 3.2 Society, religion and politics 83 3.2.1 Socio-cultural dynamics shaping power and agency 84 3.2.2 Local power structures and collective action 86 3.2.3 Traditional decision-making and conflict resolution 87 3.3 ‘Zan, zar and zamin’: honour and women 88 3.3.1 ‘Makr-i-zan’ Afghan women’s tricks… ‘Seven steps ahead of the Devil’ 89 3.3.2 Nuanced and heterogeneous realities 91 3.3.3 Resistance and change 92 3.4 Dynamic but distorted Afghan markets 95 3.4.1 Markets shaped by informality and uncertainty 97 3.4.2 Informal market regulation: social and cultural institutions 98 Contents vii 3.4.3 Trading elite, regionalism and politics 100 3.4.4 Markets and risk: the Faustian bargain? 101 3.5 Concluding remarks 103 Notes 104 4 TRANSFORMING NORMS TOWARDS UNLOCKING SOCIETAL BARRIERS 108 4.1 Social norms, values and their persistence 108 4.1.1 Unwrapping dynamics and dimensions of social norms 110 4.1.2 Cultural influences on social norms: honour codes and religion 112 4.1.3 Economic development: cultural systems as barriers and resources 114 4.1.4 Transforming norms: actors and strategies 116 4.2 Afghan norm of purdah: entrenched in religion and culture 118 4.3 Transformation of ‘layered’ purdah 120 4.3.1 Case 1: Changing attitudes through strategic religious education 121 4.3.2 Case 2: Changing attitudes through designated champions and skills 129 4.3.3 Case 3: Changing attitudes through designated champions and charisma 136 4.3.4 Examining new dynamics of language and power in norm change 141 4.4 Discussion 143 4.4.1 Complex institutional change processes: from concept to dissemination 144 4.4.2 Examining nature of evolving purdah rules across cases 148 4.4.3 Outcomes of evolving purdah: new relations, values and preferences 151 4.5 Concluding remarks 153 Notes 155 5 CONSTRUCTING INSTITUTIONS IN ENTERPRISE 157 5.1 Socially embedded institutions in economic activity 157 5.1.1 Building blocks: routines shaping organisations and firms 158 5.1.2 Economic coordination through multiple institutional arrangements 161 viii INSTITUTIONAL INNOVATION AND CHANGE IN VALUE CHAIN DEVELOPMENT IN AFGHANISTAN 5.1.3 Institutions for collective action: diverse outcomes in different settings 168 5.1.4 Creating institutions: actors, collaboration and strategies 170 5.2 Constructing ‘nested’ institutions in enterprise 171 5.2.1 Case 1: Simple institutions with organic innovation and guided evolution 172 5.2.2 Case 2: Innovative elaborate institutions with guided /own evolution 183 5.2.3 Case 3: Under-developed institutions with little innovation / evolution 193 5.2.4 Evolving dynamics of language and power in rule development 200 5.3 Discussion 201 5.3.1 Complex institutional construction: nested institutions in enterprise 202 5.3.2 Examining evolving routines across cases as a ‘window’ on enterprise 211 5.3.3 Outcomes of bundles of enterprise institutions: new evolving socio-political norms, and economic institutions 215 5.4 Concluding remarks 219 Notes 222 6 UNWRAPPING AGENCY: INTERESTS, POWER AND NETWORKS 223 6.1 Entrepreneurs, networks and agency 223 6.1.1 Towards a broader perspective of institutional ‘entrepreneurs’ 224 6.1.2 Networks and entrepreneurial outcomes 225 6.1.3 Collective agency in learning, adoption and diffusion 227 6.2 A closer look at case study actors and context 230 6.2.1 NGOs driven by women’s socio-economic development 230 6.2.2 Entrepreneurs driven by economic and socio-political interests 235 6.2.3 Power holders driven by control (and community development) 240 6.2.4 Appreciating local conditions within greater Afghan context 243 6.3 Examining actor strategies in institutional processes 246 6.3.1 NGOs as designers and advisors 246 6.3.2 Entrepreneurs as shapers and diffusers 247 6.3.3 Power holders as authorizers and boundary makers 248 Contents ix 6.4 Dominant entrepreneurs and collective power 252 6.4.1 Emerging entrepreneur types and institutional characteristics 253 6.4.2 Drawing on collective power for group or self-interest 257 6.4.3 Entrepreneurial networks in institutional diffusion and adoption 260 6.5 Concluding remarks 262 Notes 264 7 TOWARDS A DYNAMIC AND INTER-DISCIPLINARY THEORY OF INSTITUTIONAL CHANGE 266 7.1 Multi-level drivers in institutional emergence 267 7.1.1 Nested institutions in enterprise 268 7.1.2 Dual motivations in emergence of new embedded market institutions 271 7.1.3 Nuanced group cooperation and coordination 273 7.1.4 Role of trust and authority in institutional development / formalization 277 7.2 Muddling through or strategic design: multiple-actor negotiation in institutional development 279 7.2.1 Institutional design process: devils in the detail 279 7.2.2 Interaction of dynamic and diverse actors 282 7.2.3 Agents of uncertain change: diverse interests and power 283 7.3 Innovation, learning, adoption and diffusion in networks 288 7.3.1 Harnessing power of allies in creating support and critical mass 289 7.3.2 How institutions affect networks, and how networks affect institutions 291 7.3.3 Towards re-conceptualizing a multi-actor institutional construction scheme 291 7.4 Institutional outcomes: Robust or fragile? Evolving or stagnated? 292 7.4.1 Social stratification: heterogeneous purdah norms towards a new order? 293 7.4.2 Enterprise institutions: healthy hierarchies or arrested development? 295 7.4.3 Critical junctures and emerging pathways 297 7.4.4 New attitudes and preferences with broad institutional spinoff effects 300 7.4.5 What makes rule making more or less successful? 301 x INSTITUTIONAL INNOVATION AND CHANGE IN VALUE CHAIN DEVELOPMENT IN AFGHANISTAN 7.5 Concluding remarks and reflections on inclusive development 304 Notes 308 Appendices 309 References 325 CV Holly Alexandra Ritchie 373 List of Tables, Figures and Appendices Tables 1.1 Overview of research cases 32 3.1 The evolving Afghan state and economy 1970s–2001 78 3.2 Afghanistan’s sub economies 96 4.1 Purdah transformation
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