THE UNIVERSITY OF LEIPZIG

ealities on the ground. Formal institutions formulated in exclusion of informal inputs and
considerations, are always not optimal, efficient and egalitarian. When applied without
carefully or empirically analysing them, they will always lead to misleading results. This will
in most cases be based on functionalist explanations as a justification for irrational rules.
Olson puts it that, formal institutions will always decrease transaction costs, but when
inefficient will lead to increased transaction costs. 581 In order to achieve a genuine and
durable rule system cognisant of the varied interests and conflicts, it is imperative to
undertake rule mediation especially in a country whose population is composed of different
ethnic groups linked to resource commons. If a country like Kenya is to benchmark its formal
rules, it must search for moderated rules systems and methods. This must be done selectively,
consciously and deliberately, following a best practices model. 582
At issue is; to what extent Kenya’s biodiversity regime managers have emulated the bestpractices
consciously and deliberately in accordance with a genuine rule based system? The
answer to this puzzle lies in the argument advanced by Ostrom. She shapes her proposition
from well-documented cases of informal institutions that had evolved into formal institutions,
through appreciating localized arrangements. She argues that groups can evolve effective
institutions without an external coercive authority if they could solve a "common set of
problems relating to resource usage within the group itsself. 583 Naturally, this will entail that
group boundaries are clearly defined, that rules governing resource usage are well matched to
local needs and conditions, that the most affected members can participate in modifying these
rules and that the appropriating rights of members to devise their own rules is respected.
The new forest law endeavoured, though in a very limited measure to appreciate the role of
community participation, but still ignored the role played by informal institutions in the
management of forest resources. This is exhibited by the far reaching powers embedded in the
extremely formal and stringent management style adopted by the particular provisions of this
law. Therefore, although new in outlook it may not be successful in attaining its intended
functions. To understand this further we may crane our focus into viewpoints provided in the
analysis made by Yami and Ruttan. They argue that design principles can be extracted from
cases of successful groups managing their own common resources and simulated to those
groups which are having some strictures or which have failed in the resource management.
The duo postulates that these design principles may act as clues to the problems preventing
collective action in many failed instances. In short they assert that neither direct intervention
by the state nor total privatization are remedies for states to evolve successful formal
institutions. 584
581
Olson, E. 1999. A Microeconomic Analysis of Institutions. Working Papers in Economics. No. 25,
Department of Economic, Goteborg University.
582
Selter, R.1978. The Chain- Sore Paradox: Theory and Decisions. 9: 127-159.
583
Ostrom, V, D. Feeny and P, Hartmut. 1993. Rethinking Institutional Analysis and Development. Issues.
Alternatives and Choices. San Francisco: California Institute of Contemporaray Studies.
584
Ruttan, V. and Yahami. M. 1984. Towards a Theory of Induced Institutional Innovation.Journal of
Development Studies 20:203-223.
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