Entrepreneurship in and around institutional voids: A case study from Bangladesh☆
Section snippets
Executive summary
Viewed as specialized social structures and important exchange mechanisms, markets require specific institutions and rules in order to come into existence and to function. As the World Bank reiterated in its 2002 World Development Report, building institutions that support the development of markets is of paramount importance to poor people's participation in them. Yet in many developing countries those living in poverty are unable to participate in markets because of ‘institutional voids’ –
Markets and institutional voids
Over the last decade efforts by development actors – from international bodies such as the World Bank to international and local NGOs – have increasingly focused on developing and transforming the institutions needed for engaging the poor in market activities. The assumption that underlies such efforts is that markets are an effective mechanism to attain sustained increases in living standards around the world (World Bank, 2002).
Scholars from different disciplines have elaborated on
Research site, methods, and data analysis
We opted to study BRAC's efforts to target the poorest segment of Bangladesh for several reasons. First, the extremity of the economic, social, political, and institutional constraints faced by the poorest of the poor in rural Bangladesh make their access and participation in markets particularly difficult. Although Bangladesh has made significant progress in reducing poverty and improving the lives of its people, nearly half of its population of 144 million still lives below the poverty line
Women and extreme poverty
In the late 1990s local and international development actors working in rural areas of Bangladesh started to recognize that an important segment of those living in poverty had been bypassed by their programs. Many microfinance programs – often seen as the most powerful approach to bring the poor into the market economy – have failed to reach out to the very poor (Abed and Matin, 2007). Today it is widely recognized that the poor are not a homogeneous group and that different levels of poverty
Discussion
Recent research in the institutional entrepreneurship literature has contributed to our understanding of how institutions are created and transformed. Yet we still know little about 1) where opportunities come from, and 2) how institutional entrepreneurs enact these opportunities: what resources they deploy and what strategies they use to deploy them, particularly in resource constrained environments.
This study speaks to the call for more research on “how the activities that constitute
Concluding remarks
Over 30 years of experimentation and expansion, BRAC has been able to build a raft of institutional arrangements by innovatively combining and redeploying the resources it had at hand and thus enabling social and economic inclusion for the poorest in Bangladesh. By examining in detail, specific processes initiated by BRAC, the main contributions of this paper are to: 1) advance theory by bridging institutional and entrepreneurship theory; 2) generate momentum for organizational scholarship on
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Cited by (0)
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We thank Christian Seelos, Kate Ganly, Marc Ventresca, two anonymous reviewers and Jared Harris for sharing ideas and providing inspiration and insights. The broader research project benefited from financial support from the European Academy of Business in Society (EABIS), the Anselmo Rubiralta Center for Globalization and Strategy, the Center for Business in Society, and the IESE Platform for Strategy & Sustainability at IESE Business School.
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Authors are listed in alphabetical order.
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