Why Institutions Endure: Norms, Leadership, and the Difficulty of Reform

How do institutions evolve? Why are they so persistent? And why are successful institutional transformations so rare, limited to outlier cases like Singapore, Turkiye, South Korea, Botswana, and China? This paper presents a new framework linking long-term institutional outcomes related to corruption and extractive practices to the interaction between population norms and leadership traits. The framework argues that only long-duration and intensive leadership episodes generate durable improvements in governance, helping explain why reform episodes are rare. The model is calibrated to notable cases of institutional transformation. Empirically, I test the model using panel data and event studies, showing that societal corruption norms are strongly associated with leadership integrity over time. However, the absence of a valid external instrument limits causal inference; accordingly, the results are best interpreted as evidence of association rather than causation. Even so, the findings are robust across specifications and consistent with the model’s predictions. Together, the findings offer a unified explanation for both institutional persistence and the conditions under which rare but lasting reform is possible.

Dr Omer Majeed is a Visiting Fellow at the TTPI and an Associate at CAMA, ANU. 

Omer holds a PhD from the Crawford School of Public Policy at the Australian National University (ANU). He has published articles on firm growth, innovation, R&D, poverty, inequality, monetary policy, and international trade. The research presented here is part of an ongoing project being undertaken at ANU.