Planning and Budgeting

Endogenous development, as a capability of a society in mobilizing domestic resources, along with the transition of traditional material economy to knowledge-based economy, have radically changed growth theories. The endogenous development, which originally was a guidance tactic for national decision makers and planners, has been attracting attentions in economic development at local level from the late 1990s. The main purpose of the article is to explain the endogenous development and to identify a new approach to endogenous development in the field of planning; these require us to identify the necessities to apply institutional approach. Henceforth, by analyzing the changes occurred in economic thoughts and the emergence of intuitionalism in development, and also by emphasizing the role pf endogenous development in these processes, the theoretical principles of traditional vs modern view to local development will be revealed. The findings indicate that employing the institutional approach in planning for endogenous development, advances the interactions between government and people, and improves bottom-up relations, and people’s control on government decisions; moreover, it helps to form an integral approach with regards to local development, which is the very aim of any endogenous development.