How do institutions fail?

Institutions often fail due to a range of interconnected issues. Here are some key insights shared by experts:

1. Social Fabric Decay:

   • Societal institutions become tyrannical as the social fabric decays and people lose trust in each other. When the social compact deteriorates, institutions step in to enforce order, but this often leads to more authoritarian control and further failure 1.

2. Misaligned Incentives:

   • The incentives of those running institutions often do not align with the needs of the stakeholders they serve. This misalignment leads to a loss of trust and effectiveness in institutions, driving stakeholders to seek alternative systems or reject institutional authority 2.

3. Copycat Institutions:

   • Institutions that are copied from one context to another without adapting to local needs and cultures tend to fail. Imposing foreign institutional models can breed resentment and hinder the establishment of effective governance rooted in local leadership and contexts 3.
     
     1
     Societal Decay and Tyranny
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     2
     The Challenge of Institutions
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     3
     Institutional Missteps
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     4
     Power and Institutions
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     5
     Insiderism and Outsiderism
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     6
     Institutional Conflict
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4. Power and Inclusivity:

   • The success and failure of institutions are closely tied to their inclusiveness or extractiveness. Institutions that concentrate power and resources in the hands of a few often become extractive, leading to inequality and failure 4.

5. Insiderism vs. Outsiderism:

   • Insiderism involves individuals abusing their power within institutions, while outsiderism sees institutions being used merely as platforms for personal gain rather than for cohesive societal roles. Both lead to institutional erosion and failure in their roles as formative bodies in society 5.

6. Conflicts of Interest:

   • When institutions take on roles beyond their intended scope, such as when scientific bodies are tasked with policy-making, it leads to conflicts of interest and undermines their credibility and function. This was evident in the NIH's response during the pandemic, where mixed roles led to significant institutional failures 6.

By addressing these issues, societies can work towards more robust, resilient, and trustworthy institutions.