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Why Institutions Endure: Norms, Leadership, and What Enables Reform

Author

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  • Omer Majeed

Abstract

Why do trapped countries remain locked in bad institutions while a few escape? This paper introduces a novel framework in which societal norms and leadership traits drive institutional persistence and change. It offers four insights. First, leadership traits correlate with societal norms through contagion, incentives, selection pool effects, and normative alignment - cross-country tests are consistent with this framework. Second, it explains why sustainable reforms are rare. Third, it shows reforms endure only when norms shift and explains the mechanism. Fourth, in notable transformations - Singapore, South Korea, Botswana, and Turkiye - it shows enduring reforms require both duration and intensity.

Suggested Citation

  • Omer Majeed, 2025. "Why Institutions Endure: Norms, Leadership, and What Enables Reform," CAMA Working Papers 2025-36, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University, revised Aug 2025.
    • Handle: RePEc:een:camaaa:2025-36
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    File URL: https://crawford.anu.edu.au/sites/default/files/2025-08/36_2025_Majeed_Revised%20Aug%202025_2.pdf
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    File URL: https://crawford.anu.edu.au/sites/default/files/2025-08/36a_2025_Majeed_Original%20June%202025.pdf
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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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