A Microfoundational Framework of Institutions: Knowledge Transfer in Traditional Crafts for Sustainable Economic Growth

Institutions play an important role in trade and knowledge transfer; they constrain human interactions while also providing a framework for efficient social and economic interactions, as reflected in the United Nation’s SGD goals. In emerging economies, the microfoundations of institutions need to be better understood by considering the micro, meso, and macro levels of institutional players. This is especially critical for knowledge transfer in the context of traditional, craft-based industries. In this chapter, we address the SDG 8 focus on sustained and inclusive economic growth, considering the institutional and cultural diversity present in emerging economies. We present a conceptual framework of the microfoundations of institutions for knowledge transfer in an industry that provides employment for large numbers of people at the base of the economic pyramid. We highlight institutions’ multilevel nature, and the importance of the micro and macro levels in the traditional arts and crafts industry of an emerging economy.