Institutions that are supposed to play the game and enforce the game are increasingly broken in South Africa, writes Serjeant at the Bar.
The Nobel Prize-winning economist Douglas North was particularly noted for his emphasis of the importance of institutions for economic progress. He argued that institutions are the humanly devised constraints that structure political, economic and social interaction.
They consist of informal constraints (sanctions, taboos, customs, traditions, and codes of conduct) and formal rules (constitutions, laws, property rights).
Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange. Together, with the standard constraints of economics they define the choice set and therefore determine transaction and production costs and hence the profitability and feasibility of engaging in economic activity.
Expressed differently, a distinction should be drawn between an organisation and an institution. An organisation is defined as “groups of individuals bound by some common purpose to achieve objectives”.
An institution is “any form of constraint that humans devise to shape human interaction”. North divides between “formal” institutions, such as laws and rules, and “informal” institutions, such as norms, guidelines, and codes of conduct. North uses a sports metaphor for the distinction between these two definitions; organisations are the “players of the game” and institutions are the “rules of the game.”
Why invoke North and the importance of institutions underpinned by organisations at this time?
It is because both the institutions and the organisations that are supposed to play by the game and enforce the rules of the game appear increasingly broken in South Africa.
In turn, this raises two questions: is this claim correct and, if it is, what are the implications for constitutional democracy and economic prosperity for 60 million South Africans? A few high profile recent examples must suffice for the purposes of one column.
School closures
This week President Cyril Ramaphosa announced school closures and steps to be taken to stem the flow of Covid-19 designated money to corrupt parties. The school closures will have a devastating effect on learners and their future careers .
The question which arose out of this decision is whether the decision was taken purely on scientific/medical grounds or on the basis of the fact that the educational unions hold powerful political influence.
After all, a number of leading researchers in this field had urged government to keep schools open.
Let us accept that there will be some schools where urgent attention and additional resources are required to ensure the requisite safety, but surely the overall policy could contain nuance to ensure that most children continued in school.
In short, there is no clarity about the rules of the game, their rationality or which parties are allowed to play in the formulation thereof. The President announced new steps to be taken to curb corruption and spoke of the organisations that would be employed to “bring the corrupt to book”.
But these are the very same organisations that have failed the country so lamentably to curb corruption over the past decade.
The further question arises as to why they need presidential prodding before they act; after all there is more than enough corrupt practices which have been around for years for all of these organisations to have produced convictions of some of the corrupt. But to date almost nothing of consequence has occurred on the prosecution front.
Corruption
Indeed the very day after the President’s speech the media broke a story about significant overpayment by the Eastern Cape government for tablet devices for e-learning. It may, of course, be incorrect reportage and a comprehensive explanation will be forthcoming. But at the very least it this kind of allegation that needs investigation, yet for years all manner of similar reports about problematic practices have gone unanswered.
Moving to other organisations and the rules of the game as practiced – the University of Cape Town has been in the news for serious allegations of bullying by the Vice-Chancellor.
Again the responsible authorities seemed particularly anxious not to play by the rules of transparency and accountability.
An apple pie type statement by the executive which speaks of dealing with the problem is hardly encouraging if the integrity of the institution is to be restored in the eyes of the country; after all UCT is a critically important national organisation and its welfare is of national interest.
A further example concerns the judiciary.
Attack on the Chief Justice
It is extremely worrisome when the legal representative of a senior judge launches upon an unbridled attack on the Chief Justice.
That the judge concerned had every right to appeal the decision of the Chief Justice and to lay out his grounds of appeal is both understandable and legally justifiable. But the act of producing a letter that went far beyond grounds of appeal and was couched in such strident personal terms, particularly about a Chief Justice who has led the judiciary with such distinction through the most trying of terms, is deeply disappointing.
Again, it can only serve to weaken a key set of institutions and the organisation that is supposed to enforce the rules.
These examples reveal the extent of the weakness of institutions in this country as practices and rules are jettisoned or ignored. If this continues, the very foundations of constitutional democracy are weakened and, as North argues, without viable institutions and organisations that both play by and enforce the rules of the game, sustained economic progress will not take place.
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