ABSTRACT
In this chapter, we shall examine preconditions and the main tendencies in the development of institutional theory. Special attention will be paid to the link between institutional theory and mainstream economic thinking. This link is not simple. Institutional theory and economic thought have passed through various challenges. However, due to this fact, they have both been enriched. Institutionalism constantly criticized mainstream thinking, but it also developed under the effect of neoclassical criticism. Now, each of these theories assumes the other and even creates itself as the other. This has resulted in a transformation of both neoclassical theory and institutionalism, which is a rather complex direction in economic thought, a direction which belongs to the future.
