Institutional Economics is a branch of economics that focuses on the role of institutions—rules, laws, and norms—in shaping economic behavior. It examines how these institutions influence the decisions of individuals and organizations, affecting overall economic performance. By understanding the impact of institutions, economists can better analyze economic development and policy effectiveness. This field contrasts with traditional economics, which often emphasizes individual choices and market mechanisms. Douglass North, a key figure in this area, highlighted how institutions evolve over time and how they can either facilitate or hinder economic growth. Institutional Economics thus provides a broader perspective on economic interactions.