Building Inclusive Markets in Rural Bangladesh: How Intermediaries Work Institutional Voids

Abstract

Much effort goes into building markets as a tool for economic and social development; those pursuing or promoting market huilding, however, often overlook that in too many places social exclusion and poverty prevent many, especially women, from participating in and accessing markets. Building on data from rural Bangladesh and analyzing the work of a prominent intermediary organization, we uncover institutional voids as the source of market exclusion and identify two sets of activities-redefining market architecture and legitimating new actors-^as critical for huilding inclusive markets. We expose voids as analytical spaces and illustrate how they result from conflict and contradiction among institutional bits and pieces from local political, community, and religious spheres. Our findings put forward a perspective on market huilding that highlights the on-the-ground dynamics and attends to the institutions at play, to their consequences, and to a more diverse set of inhabitants of institutions. If someone who has no property rights under the law, who has had no formal education, who has no legal right to divorce, who will very likely be beaten if sbe seeks employment outside the home, says that she endorses traditions of modesty, purity, and selfabnegation, it is not clear that we should consider this the last word on the matter.-Marta Nussbaum This article is the outcome of a truly collaborative effort, and all three authors contributed equally. Although our work is about breaking conventions, we for once adhere to conventions in publishing and list authors in alphabetical order. We would like to tbank Tima Bansal for ber exceptional guidance and tbree anon)rmous reviewers who encouraged and helped us to find and refine the empirical and theoretical nuggets in this project. This article would not have been possible without BRAG and the people that make BRAG. We particularly thank Fazle Abed for sharing insights and wisdom. We are also grateful for the following people who graciously shared their concerns and suggestions:

Intermediation for technology diffusion and user innovation in a developing rural economy: a social learning perspective

“…Such research would not only provide real-world laboratories for improving technology domestication and innofusion among end-users, but also cast light on the role that different contextual arrangements may play in facilitating or inhibiting university-industry intermediation. Finally, a promising avenue for future research is examining how research and advisory centres, as institutional entrepreneurs, fill institutional voids (Mair, Marti and Ventresca 2012) in order to effect domestication and innofusion, within a variety of local production systems, by using situated learning theory. …”

Enhancing the Impact of Cross-Sector Partnerships

“…This interaction can create indirect and unintended effects that affect the overall impacts of partnerships. There is a growing literature that tries to take the context of partnerships into account in order to make a diverse assessment of impact, in particular in contexts characterized by institutional gaps (Kolk and Lenfant 2012;Mair et al 2012). Many of these impact measures, however, are still based on ''perceived impact'' rather than objectively defined impacts.…”

International business responses to institutional voids

“…The weak or fluid nature of institutions in emerging markets suggests that activities of firms revolve more around social networks and on family or other social connections (e.g., Dieleman & Boddewyn, 2012). For example, even though societal beliefs about women had not been previously related to institutional voids, Mair et al (2012) shed important light on the systematic influence of this cultural norm on access to entrepreneurial opportunities. It is likely that other informal institutions also have an influence on the functioning of markets and creation of voids.…”

“…Similarly, RiveraSantos et al (2012) show that in subsistence markets where resource and institutional constraints are severe, partnerships involving multiple actors from differing sectors serve as means for alleviating institutional voids. Mair, Martí and Ventresca (2012) point out how social norms and community structure in Bangladesh can create market exclusion for impoverished women. These studies highlight how institutional voids in the social system can bring about market failure.…”

“…For example, firms may mitigate institutional absences or substitute formal institutions by collaborating with local actors (Meyer, Estrin, Bhaumik, & Peng, 2009;Khanna & Palepu, 2010) or creating new organizational arrangements (Dahan, Doh, Oetzel, & Yaziji, 2010;Kostova & Hult, 2016). To address shortcomings in formal institutions, they may rely more heavily on informal institutions (e.g., Mair, Martí, & Ventresca, 2012) or influence governments to change institutions . Rather than taking institutional differences as largely given, appearing as objective and taken for granted by firms, we argue that voids become enabling when firms enact them.…”