Abstract
There is growing recognition within local and regional studies regarding the importance of institutions. A 'soft institutionalism' predominates, which is criticised here for leaving out the explicit role of the State and for having a bias towards synergies and positive externalities. We seek to contribute to an institutional political economic theory of local development. We bring together social and political conceptions of 'old institutional economics' and evolutionary economics, and the State is explicitly brought back into the analysis. The construction of new institutions is explored as a path dependent process in which institutions (re)shape the development path of an area in a particular direction. Using different kinds of power resources, different social groups struggle for control. We use the framework to analyze the divergent stories of two cases of local development in Brazil based on tourism. Prainha do Canto Verde developed community-based tourism, while in Jericoacoara local development culminated in mass tourism.
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