Abstract
This essay reviews the concept of 'institutions' used in recent economic literature concerning firms and national development, pointing out its limitations. It proposes an alternative framework relying on classical and contemporaneous sociological theory for overcoming some of them, relating the concept of institutions to other basic elements of culture and social structure. It is then used for analysing the failure of attempts to transplant institutions from developed countries to southern countries and privatisation in Mexico. It also examines the influence of this framework on institutional theories of social change and identifies the sources of change at different levels of significance and causal scope. The theory of modified change is then applied to demographic debates about historical and institutional factors determining the transition of fertility. It discusses the value of such institutional framework for social theory and development policy.