The interplay of wasta and formal institutions in Lebanon

Based on the institutional theory perspective, this paper explores the use of wasta as an example of informal social networks prevalent in failed states and its reinforcing effects. The authors conducted a qualitative study proposing that wasta, a form of informal networks, is being used in
Lebanon to overcome the difficulties of living in a failed state. An analysis of the interviews allowed the authors to examine the circumstances and situations that govern the use of wasta from an institutional perspective paving the way for a better understanding of the process of wasta practice and the challenges resulting from its use in Middle Eastern countries, specifically in Lebanon. The findings confirm a reinforcing relationship between using wasta and weak
formal institutions in failed states, highlighting the needs and sometimes preference to use wasta to navigate business transactions. Thus, managers and international organizations seeking to work in Lebanon and Arab Middle Eastern countries need to be aware of the prevalence and nature of this informal practice and be prepared to navigate and utilize it in their business transactions.