The new institutional economics: its relevance

Abstract

Corruption is a major political and economic issue in India. The stakes, value, frequency, and costs of corruption have become exceptionally high in the history of modern India. This is partly because some of the tenets of free market mechanism are implemented in the absence of underlying necessary institutional conditions for efficient and fair functioning of the market mechanism. The objective of this paper is to bring forth the relevance of the insights of the new institutional economics to the functioning of the Indian economy.