Permanent self-reproduction of crises or getting into so called development traps in under- developed countries constitutes one of the most signi cant world problems. An explanatory hypothesisis that antagonistic relationship between formal and informal institutions makes it impossible to overcome path dependence. The problem is illustrated by the case of Rwanda, which, despite the large-scale foreign aid in the 1960s-early 1990s, failed to resolve the growing socio-political contradictions that eventually led to the 1994 genocide. However, since the 2000s Rwanda has been demonstrating an upward trend especially in governance and control of corruption. In the author’s view, success in the post-genocidal period was de- termined by two factors: rst, by the institutional vacuum created by the collapse of competitive rules and practices of the President Habyarimana era; second, by the e ective leadership shown by the ruling elite support of informal practices to overcome the crisis. Between the possible reform options the choice was made in favor of formalization of autochthonous practices, introduction of traditional or restored ( lled with a new meaning) institutions into the legal sphere, and creation of new rules. Rwanda is therefore an example of successful institutional transformation.
Key words: development traps, Rwanda, foreign aid, World Bank, western donors, institutional changes, formal and informal institutions, traditional norms and practices.
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