Misuse of Institutions: Its Causes and Consequences

Abstract

Institutions are often misused, i. e. applied or resorted to for reasons which have little in common with their intended or anticipated purpose. The aim of the present paper is to get a further insight into the origins and causes of institutional misuse. A typology and cost-benefit analysis of misuse of institutions are presented and illustrated by examples largely drawn from Russian realities. Causes of vulnerability of institution to misuse are discussed. It is argued that institutions are not protected from misuse at the grassroots due to unresolved collective action problems, whereas economic and political elites are either indifferent to misuse of institutions or perpetrate such misuse by subverting market institutions for the purpose of rent extraction.