The paper discusses and reviews various directions within new institutional economics. A central question of concern is whether theories of institutionalism based within rational choice reasoning provide a theoretical basis for understanding institutional formation and change. The paper presents what is perceived as core elements of rational choice theory, and focus is on new institutionalism in particular. General perspectives are compared to the works of Robert Bates. By way of concluding, the paper questions whether rational choice theory, as it evolves to include an increasing number of factors such as institutions, ideology, norms and culture, may lose its parsimony and strength.

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