The New Institutional Economics explores how institutions impact long-term economic development, integrating neo-classical tools through the analysis of transaction costs, property rights, and governance. More contemporary works, such as those by Acemoglu and Robinson, link political and economic systems to development via inclusive or extractive institutions. While the NIE has enhanced the centrality of institutions and historical path dependency in economies, the approach is often critically regarded as simplifying history into models of rational choice and efficiency, overlooking conflict as well as cultural and social dimensions. This research underlines that a more comprehensive approach requires a combination of theoretical analysis with historically grounded evidence, integrating institutions, power, culture, and social conflict in order to understand better economic development.