The New Progressivism and its implications for institutional theories of development

Context A growing body of literature argues that the world is better off now than it ever has been and that things will only get better. This trend, long identified in advanced economies, has more recently manifest in low‐ and middle‐income countries and is attributed to the rapid diffusion of technological innovation through global trade, investment, communications, research and educational networks. Purpose We label this literature “New Progressivism”, mapping its main claims and examining its limitations. New Progressivists pay insufficient attention to the interaction between technological innovation and institutional capacity. More specifically, we show that the New Progressivists fail to explain existing patterns of stagnation and regression, and suggest a modified approach. Approach and Methods Accounting for the significance of institutional pre‐ and co‐requisites in facilitating the uptake of innovation, we analyze the different interactions between technological innovations and institutional capacities. We then provide illustrative examples of these relationships drawn from the areas of health, education, and financial development. Findings Technological innovation has vastly improved human well‐being in many countries in recent decades, but understanding why innovation had been adopted in some jurisdictions but not others and why it has not always proven beneficial if adopted requires an account of jurisdiction‐specific institutional landscapes. Policy Implications In many contexts technological innovations will not achieve their full potential without attention being paid to their institutional pre‐ or co‐requisites. Technological innovation, by itself, provides no easy escape from the often admittedly daunting challenge of reforming dysfunctional institutions in low‐ and middle‐income countries.