Quick guide to New Institutional Economics

The old field of Comparative Economic Systems lacked a theoretical framework, which New Institutional Economics now provides. The paper is a brief guide to NIE: its strength, weaknesses, policy implications, and future tasks. The intellectual interest in the NIE approach is directly related to the gap between prevailing economic property rights (institution) and best practice (most productive) arrangements. A large productivity gap on a national scale is mainly found in two circumstances: in low income countries that fail to import and adapt existing technologies, and in high income countries failing to cope with new technologies, such as digitization.