The Transplant Effect

An organ transplant is a serious procedure. There are specific steps to take before, during, and after surgery. Several tests for compatibility are done, and the operation itself involves a careful separation and connection of nerves, veins, and whatnot. Doctors need to prevent infections and to be alert to rejection. In spite of that, a lot of transplants have been successful and people whose chances of living were minimal can continue with their lives. 

If transplants of organs are tough, transplanting institutions from one society to another might be eve tougher, and the check-list is not clear. Are compatibility checks needed? Is the equivalent of a doctor necessary to perform the procedure? Does the recovery need monitoring? What kind of complications can happen? If societies are like human organisms it make sense to see transplants of institutions as transplants of human organs. A substantial difference, however, is that organs connect tissue, blood cells, etc., but institutions connect people. There are many reasons why organs are rejected, in the same way that institutions can be. 

This article by Valentin Seidler is called When do institutional transfers work? (Journal of Institutional Economics, January 2014). He describes the "transplant effect:" when taking institutions from one place to another fails, and he compares two societies: The Bornu Empire of northern Nigeria, with the Tswana society from Botswana. He looks at the colonial and independence periods. The first is a case where the "new" institutions "did not stick," the second is considered a successful "transplant." 

The Kanuri of Bornu Empire have been chosen, because they are a larger, homogenous, landlocked, and pastoralist ethnic group and may be representative for other societies with similar ethnic characteristics. 

He highlights the role of cultural entrepreneurs, institutional entrepreneurs, and political entrepreneurs  

Political actors and cultural entrepreneurs can support the process of institutional transfer. . .

Yet, for the investigation of why the transplant effect occurs to varying degrees across countries, the key elements remain vague: What makes political and cultural entrepreneurs act (rent seeking?). How do they obtain the necessary information of the prevalent cultural norms in the receiving country and of the imported institutions? Which contextual parameters promote or obstruct institutional change? 

One society can transplant formal institutions but, of course, the hardest is to successfully transplant informal institutions. 

In brief, institutional change is possible by a gradual process of renegotiation between agents or facilitated by exogenous shocks (crises, wars, revolution etc) which break some institutions out of path dependence and allow the establishment of new institutions from scratch. . . Either way, the newly established institutions may or may not present the most efficient solution depending – among others - on interdependencies with other existing institutions (e.g. cultural beliefs) and the information of establishing agents.

Transplant of organs can be successful for many reasons. Success depends for example on the way in which the immune system responds to the new organ or tissue. The immune system may reject it, and that is why immunosuppressant drugs are used to reduce the strength of the immune system (Wikipedia). That extrapolated to the sphere of social institutions means that the institutions to be replaced have their defense system which reacts against the new ones. In fact, if we might learn something from this analogy is that developing ingenious ways to deal with the immune system of the status-quo is one of the main determinants of success of "institutional transplants."  

Medical transplants are expensive, and either the patient, an insurance company, a social insurance program, or a combination of the three covers the costs. For institutional transplants who pays the costs? 

First, most scholars would agree that institutional change benefits from a sharp break from established practices (Williamson 2000, p. 598, Roland 2004, p. 115, De Jong and Stoter 2009, p. 321).

[In the case of the Kanuri people from Bornu] indirect rule was chosen to effectively establish control and British administration over 15 million people with limited financial and human resources (Crowder 1978a, p. 179).

There is indeed a period of time necessary for the new organ to adapt to its new environment, and also for the environment to adapt to the new organ. That period of time is critical for the patient recovery, and the same happens in institutional transplants.