Informal rules! Using institutional economics to understand service provision in Turkey's spontaneous settlements

Turkey's spontaneous settlements (gecekondus) house half the urban population and face infrastructure deficiencies that reduce quality of life and economic productivity while increasing the vulnerability of the urban poor. This article reports on research that used the new institutional economics to examine the formal and informal institutional frameworks for infrastructure provision in gecekondus. In theory, formal rules should create incentives that produce behaviour. However, a key finding was that rules are generally irrelevant. In fact, in the absence of credible formal rules, pressures arise that help shape informal rules which then result in behaviour. This has important implications for both institutional theory and daily practice.