The Credibility Thesis predicts that when institutions persist in time and space they likely fulfill a certain function, if not, they would have atrophied, changed or gone extinct. This principle holds regardless the form of institutions – private/public, formal/informal, and secure/insecure – and implies the necessity for caution and restraint when considering the design and establishment of new institutions.

The immediate relevance of the theory for the understanding of policy is its refocusing from institutional form towards function, and its methodology that helps identifying the policy options in accordance with the role that institutions perform in a time and space-dependent environment. This is particularly important in a poor, developing context, where land plays a crucial role in the provision of social welfare and security.

The methodology generally proceeds in different steps:

Step 1: Determine credibility level, i.e. the functionality of institutions and property rights. This can be done through various indicators:

• Actors’ perceptions of institutions, which can be operationalized through the FAT Framework. Hypothesis: the larger the divergence between actors’ perceptions of “institutions-in-use” versus “institutions-desired”, the lower the credibility.

FAT Framework (Source: Ho, 2016)

• Actors’ perceptions of conflict, which can be operationalized through Conflict Analysis as measured through indicators including origin, frequency, nature, length, outcome, intensity, and timing. Hypothesis: the higher the level of perceived conflict, the lower the credibility. An example of its application can be found in Ho (2014).

Conflicts Analysis in practice (Source: Ho, 2014)

• Speed of institutional change, which can be operationalized through an “Institutional Archaeology”, the meticulous description of institutions over time. An institutional archaeology over time makes use of “multi-angulation” of different sources, qualitative and quantitative; socio-economic, legal-political, and cultural. This can be depicted in (add attached Figure multi-angulation). Hypothesis: the higher the relative speed of institutional change, the lower the credibility.

Multi-angulation (Source: Ho, 2016)

Step 2: Based on current credibility, explore policy options. This can be operationalized through the CSI-Checklist (Credibility Scales and Intervention Checklist). After the current levels of credibility have been assessed, the CSI Checklist may allow decision-makers to pinpoint available policy options. As credibility is not to be seen as a dichotomous variable, but positioned on a continuum, these policy options can constitute a mix including: non-intervention, co-optation, facilitation, prohibition and ordaining.

• For instance, when the credibility of institutions and property rights of informal settlements is perceived as high by social actors on the ground, the best policy option would be “non-intervention”. Likewise, when moving down on the credibility scale, one could also consider co-optation, or “formalizing that what is already done”. For more information, see the introduction by Ho (2016).

SCI-checklist (Source: Ho, 2016)

For further reading see Routledge.