Institutional economics is a branch of economics that focuses on the role of institutions—rules, laws, and social norms—in shaping economic behavior. It examines how these institutions influence the decisions of individuals and organizations, affecting economic performance and development. This field contrasts with traditional economics, which often emphasizes individual choices and market mechanisms. By analyzing the impact of institutions, such as property rights, government policies, and cultural norms, institutional economics seeks to understand how they contribute to economic outcomes and the functioning of markets.