‘Modern’ or ‘formal’ and ‘traditional’ or ‘informal’ institutions of social accountability both exist sometimes side by side, sometimes in combination in developing and transition countries. Formal institutions are defined as the ‘Modern’ institutions that have been constituted by law and common acceptance – such as banks, ministries, municipalities, (foreign funded) factories etc. Traditional or indigenous institutions and relationships – which are ‘informal’ as compared to the formal ones which are bound by formally enforceable rules and sanctions – have evolved over time in countries, are deeply rooted or embedded in local communities as well as in local culture. These may include caste-councils or the strong and inclusive organisations of fishing communities, but also informal micro-enterprises, saving groups or tribal chiefs, as for example in Ghana.

 It may be noted here that for all their possible merit, such ‘traditional’ ‘indigenous’ or customary organisations and institutions also may harbor negative traits, for example that they are patriarchal and autocratic. Neither is it true that such institutions, even if very old and deeply rooted, are also purely ‘traditional’ or that they have not changed in the course of history. For example, Maru (2006) indicates that in many parts of Africa traditional chiefs were used by colonial powers the help exploit colonies; it was then the chiefs who exploited their people. This has led to the concentration of much power in the hands of these chiefs, which may still persist up to the present day.

Both ‘modern’ ,‘formal’ and ‘traditional’ and ‘informal’ institutions exist and co-exist, and that apparently quite modern and formal organisations may me influenced or permeated by traditional and indigenous values, norms and practices.

However, we also argue that both ‘modern’ and ‘traditional’ institutions may perform well or, in contrast, poorly in terms of accountability. One may have a ‘modern’ or formal system (e.g. ‘participatory budgeting in Porto Alegre’) which is quite accountable, works well by and large, and which is not influenced or distorted by corruption, elite or mafia- capture and other negative traits, and which includes effective accountability arrangements. Similarly, one may have a ‘traditional system’ for example the Adji Game in Benin (Oosterwaal, 2004) which has a high level of credibility, acceptable outcomes and where again corruption and elite capture seem relatively absent’. Logically, there will also be mixed forms, for example where governments or donor agencies have built on traditional institutions, for example the Gacaca courts in Rwanda, which is another example of a ‘working’ arrangement where justice is dispensed apparently to the satisfaction of many and in conditions of accountability. Indeed, there is often no clear line between what may be called ‘formal’ or ‘indigenous’ institutions, but there is rather a continuum, where the two mix or overlap.