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Nowadays, New Institutional Economics (NIE), as the most important heterodox school of thought in Economics, is not only against mainstream, but also supplement. Therefore, due to the lake of adequate representation, the neoclassical economics is sever to explain issues in developing countries, recognition and the use of institutional analysis in solving development problems. Amongst NIE’s, three theorists and Nobel laureates are prominent. They are Ronal Coase, Douglas North and Oliver Williamson. In this article, the most prominent theories of Williamson, Nobel laureate in 2009 for Governance, are discussed. According to his articles, the most important contribution of Williamson to NIE can be summarized in four categories as follows: • Transaction cost economics • Bottom up approach in analyzing development issues • Four levels of social analysis as a starting point in development reform and • Economics of governance. These theories and more specifically, bottom up approach and four level social analysis have a good power in explaining development issues in Iran.