ABSTRACT
The dissenters from conventional economic theory have devoted the main part of their scholarly endeavours to analysing specific problems in regard to which they found this theory insufficient and faulty. A more institutional approach will win ground, simply because it is needed to deal in an effective way with the practical and political problems that tower over us, and which threaten to overwhelm us. The most serious defect of the closed models utilised when studying the development problems in less-developed countries was that they systematically left out of consideration the noneconomic factors. In these countries, which for ages have been socially and economically stagnant, rigid institutions and inflexible attitudes create inhibitions and obstacles to development to a vastly greater extent than those in developed countries. Even if institutional economists as yet have only made sporadic contributions to the analysis of the mounting problems, it is clear that they cannot be analysed in the closed models of inherited economic theory.
