THE NEW INSTITUTIONAL ECONOMICS AND ITS IMPLICATIONS FOR DEVELOPMENT THEORY
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Abstract
The Western tradition of political theory, at least from the time of Plato and Aristotle, has identified personal greed as the dominating cause of injustice.1The implication of this identification is that justice in society results from the virtuous behaviour of individuals. The role of institutions then is to prescribe and promote virtuous behaviour. But what to do when insufficient people understand or feel compelled to follow the path of virtue, or, worse, when the institutions of society themselves are tainted with moral corruption? What if the people, when understood 'as they really are', are not capable of the degree of virtue which the just society requires?