ABSTRACT
This chapter examines the implications of the new institutional economics (NIE) for analysing state failure in developing countries. The NIE approach aims to identify the institutional causes of state failure. In their chapters Bates and Toye have argued that the economic consequences of particular institutions depend on the social and political context in which they are placed. The question is whether the results of the NIE analysis can be grafted on to data about political differences across countries or whether recognising political differences requires abandoning the NIE approach.
