Perceptions of Institutions and Development in Rural Costa Rica

Abstract

Dissecting complex institutional webs and the roles they play (or should play) in development is an ongoing endeavor. To better understand the relationships between local and external institutions in small communities—specifically, whether these two sets of institutions act as complements or substitutes—we analyze subjective assessments of organizations and development indicators in nine rural Costa Rican towns. We expect to find that attitudes toward both local and external institutions are positively related to perceptions of development indicators. While the regression model we present yields a relationship between the perceived strength of local institutions and development indicators, we fail to find such a relationship with the importance respondents place on the presence of external organizations in their community. The results of a second regression model suggest that individuals may link the importance of external institutions with the specific services they provide. We consider that weak informal ties (embededdness) established by external institutions in these communities may account for the observed lack of a relationship between development indicators and the importance of external institutions. Keywords: community development, complementarity, embeddedness, substitution, synergy