Globalization and Development: An Institutional Approach

In recent decades, due to spreads of Information technology and electronics in many spheres of human activity, we find that the distance of the countries and territories are highly shortened. As a result, globalization has been a vital subject to be studied by researchers and economic thinkers all over the world. Based on our approach to neo-institutional economics, we try to analyze the challenges that developing countries are dealing with, due to globalization. In this paper, we shall discuss the threats and opportunities that developing countries are confronted due to globalization. In this process, we shall concentrate our emphasis on two pivotal Institutions of market and state in the developing countries. Our main emphasis is on the point that major global issues have long-term strategic and fundamental characters and issues such as energy, environment, and increasing inequalities within and between countries have become increasingly important than the past through applying an institutional view owing to dramatic increase in the limitations and inabilities of the approach of market fundamentalism. These problems are likely to be better rectified by following neo institutional economics.