Understanding the Relationship between Institutions and Economic Development - Some Key Theoretical Issues

Abstract

This article discusses how the theory on the role of institutions in development can be improved by critically examining the current orthodox discourse on institutions and highlighting some of its key theoretical issues that need further refl ection. While the very nature of the subject matter makes it unlikely that we will any time soon have a complete theory of institutions that will adequately address all the above-mentioned theoretical problems, identifying the problems with the currently dominant theory is the fi rst step towards building such theory.