Institutions and Socioeconomic Development: Do Legacies and Proximity Matter? Case Studies of Indonesia, the Philippines, and Thailand
Authors: Jameaba Muyanja-Ssenyonga , Purbokusumo Yuyun , Kristiadi Joseph 
Published: November 2022

The overarching objective of this paper is to analyze relationships among institutional development, democracy, and socioeconomic well-being. Specifically, the paper assesses the influence of a country’s political and economic, and social systems and cultural fabric on the nature, form, and quality of institutions, and how the interdependence of the relationships influences development outcomes. The paper used a comparative research design approach to the developments in the evolution of the interrelationships among political, socioeconomic, and cultural institutional development on democracy and development outcomes, including economic growth, education, health, and poverty in Indonesia, the Philippines, and Thailand. Mixed methods were used including documentary analysis and review of theoretical and empirical literature; and complemented by informed opinions from academics, public policy practitioners, constitutional development experts, democracy and socioeconomic development and institutions obtained using interviews via email; and regression analysis of the democracy and socioeconomic model. Research results underscored the importance of implementing supportive institutions for quality socio-economic development outcomes. Specifically, analysis results showed that government effectiveness is a good proxy and embodiment of a functional and reliable institutional framework. Correlation results showed that rule of law, political stability and absence of violence, human development index, and competitiveness and control of corruption have a positive and strong association with institutional quality Results on democracy vary across the three countries. Democracy shows a negative association with development and business climate in the three countries. Various obstacles hampering the emergence and sustaining strong implementing and supportive institutions include rising income inequality, widening urban and rural income disparity; disconnect between public aspirations and public policy outcomes; entrenched beneficiaries of past policies and institutions that are rooted in the domestic political economy continue to influence public policy regime and by extension, albeit indirectly, both the composition and trajectory of institutional quality. Consequently, institutional quality remains fledgling due to weak political culture that has created favorable conditions for increasingly pervasive indications of policy ‘capture’. Institutional capacity development has been lopsided and disparate between urban and rural areas; driven by political expediency which has taken precedence over economic and social development objectives and rationale; growth has shown an upward trend but its distribution has been affected by regional policy bias. Implications for aligning public policy with societal well-being enhancing outcomes through the improvement of institutional quality and tying policy outcomes to public interests and aspirations were provided.