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The lack of statistics has hampered attempts to estimate fixed capital for the agricultural sub-sectors of Iran. Giving a non anonymous agreement on the depreciation rate of capital in machineries and constructions, an indirect method of estimation is employed using capital consumption statistics in different sub-sectors of input-output tables. In this study, capital stock is estimated in agricultural sub-sectors of Iran using the perpetual inventory method. According to the results of this paper, the capital stock in 2006 is estimated to be 53374.9 billion rials in cropping and horticulture, 24334.6 billion rials in animal husbandry, 4982 billion rials in forestry and rangelands and 16374.2 billion rials in fishery sub-sectors at constant 1997 prices, respectively. The findings based on the five year development plans of the country revealed that over the third development plan, the total agricultural capital stock, both in machinery and equipment and constructions, experienced the highest growth while during the second development plan, the machinery and equipment capital stock experienced the lowest growth. Moreover, during the first development plan and over the eight year war, the construction capital stock experienced the lowest growth.

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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.