The contextualist turn and schematics of institutional fit: Theory and a case study from Southern India

The policy literature has long recognized the inherent need for a program to fit the unique conditions found in a certain context. We present a theory of institutional contextualism that focuses on the mechanisms by which actors adapt a policy design to fit a situation. We conceptualize institutions as phenomena that are constituted by a constant dialectic between text (the general blueprint) and context (the particular setting). The first half of this dialectic, which is the diffusion of the constitutive text or norm onto the institutional setting, has been discussed in the literature. Our research focuses on the second half, and we delineate, in concept, mechanisms for fitting the program to the local context. We then use a case study of improvised microfinance programs in Tamil Nadu, India, to illustrate how this occurs in reality. The research underscores the unexamined link between effective governance and contextual fit and offers a typology of mechanisms for fit that should inform future research.