New Institutional Economics incorporates a theory of institutions - laws, rules, customs, and norms - into economics. It builds on, modifies, and extends neoclassical theory. It retains and builds on the fundamental assumption of scarcity and hence competition - the basis of the choice theoretic approach that underlies microeconomics.
It has developed as a movement within the social sciences that unites theoretical and empirical research examining the role of institutions in furthering or preventing economic growth. It includes work in transaction costs, political economy, property rights, hierarchy and organization, and public choice. It involves work in political science, law, sociology, anthropology, and other social sciences.