This thoroughly revised, extended and updated edition of a critically acclaimed textbook provides an accessible and cohesive introduction to the burgeoning discipline of institutional economics. Requiring only a basic understanding of economics, this lucid and well-written text will be essential reading for undergraduate and postgraduate students wanting to understand the problems of the real world - such as entrepreneurship, innovation, the cost of the welfare state, international financial crises, and economic development. As institutional economics is now revolutionising policy making, the book can also serve as a guide to the pressing problems facing policy makers in mature and emergent countries alike.

Key features include:

- A short 'Primer' at the beginning of each chapter to highlight the main issues and their relevance.

- Key Concepts such as 'institutions', 'economic order', 'coordination costs', competition' and 'public policy' are highlighted and clearly defined.

- International coverage is ensured as the three authors, experienced academic teachers, work in the US, Europe and the Asia Pacific.