The main purpose of this paper is to explore the conceptual framework of governance based on the institutional economic approach emphasizing the views of John Rogers Commons. To this end, as a qualitative approach, the focus group of the research method was applied. According to Commons, we first encounter a conflict of interest between individuals, groups, and organizations, which is itself due to the scarcity of resources. Then, collective action is formed to overcome such contradictions. In view of that, there is negotiation, exchange, and collective bargaining that ultimately lead to working rules among human beings to come to a practical result as to live and work together under an agreement that engenders order, security, and dignity. Commons considers working rules as a major means for organizing society's affairs; however, such working rules are formed and developed within the framework of collective democracy. Order and rules cannot be enforced and sustained unless the views and the voice of all parties and stakeholders are heard on an equal basis. Collective democracy as a method of governance facilitates the achievement of such a goal.
