The New Institutional Economics and its applicability to development

The several remarkable developments in the social sciences which have come to be known as the New Institutional Economics (NIE) have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development. This paper identifies two important components of the NIE and illustrates both (a) potential complementarities between them and (b) their applicability to various problems and policies in the long-term development of developing countries. © 1989.