Strengthening a society’s institutions strengthens society itself. Weak institutional capacity is a major obstacle to economic development. Societies are resilient if they are economically strong. When institutions are strong, they not only serve their communities but drive meaningful change at the institutional, national, and international level.
As countries strive to be economically resilient, and as a result, competitive, they are finding that the strength of their institutions is key to their success. Institutional Strengthening is proving to be the “tipping point”, the point at which a series of small changes or incidents at the institutional level focused on specific competitiveness concepts, becomes significant enough to cause a larger, more important change. It is an open and transparent process that strengthens confidence of the community in the institution.
Institutional strengthening focuses on improving the overall quality of the institution.
Institutional quality is a broad concept that captures law, individual rights and high-quality government regulation and services. It presents principles, minimum standards, best practices, business processes, references and tools for effective, efficient and sustainable organizations. To the extent institutions undergo institutional audits of these quality assessments, they will strengthen their capacities and their competitiveness. Institutional quality and economic development reinforce each other over the longer term. Improving institutional infrastructure (enhancing rule of law and quality regulation, improving contract enforcement, securing property rights and reducing uncertainty) play a key role in delivering long‐run economic development and social prosperity.
The World Economic Forum conducts the Global Competitiveness Index on an annual basis. This index focuses on country competitiveness based on the strengths and agility of their institution. Based on 12 drivers of productivity, or “pillars”, the framework emphasizes factors that will become more significant as the Fourth Industrial Revolution gathers pace, including human capital, agility, resilience and innovation.
What you measure is what you change. Focusing on these pillars, and measuring the indicators set forth in the pillars, will lead to institutional strengthening at the business level and the governance levels of society.
To mitigate the effects of the shifts in regional and global competitiveness, the 4th and 5th Industrial Revolution, what are we doing to strengthen our institutions and position ourselves for success and resiliency?
How do we stack up in the Global Competitiveness Index?
How do our institutions self-assess and measure the indicators of institutional strength?