This book explores the NIE, with a critical assessment of its theoretical contributions. This second edition aims to explain and assess some of the major refinements, extensions and useful applications that have been introduced into the body of neoinstitutionalist thought in recent years. References have been updated and more attention is given to the overlap between the NIE and developments in economic history and political science. New material includes the addition of parallel developments in the fields of economics sociology and its attacks on representatives of the NIE as well as an explanation of the institution-as-an-equilibrium-of-game approach.