In this paper I advance a model in which institutional innovation is induced by changes in resource endowments, cultural endowments and technical change. I also introduce the role of advances in social science knowledge as a source of institutional innovation. The sources of institutional innovation are illustrated by changes in land tenure and labor relations in Philippine agriculture and by the transition from command and control to market based systems of resource management in the United States. In a final section I elaborate a pattern model that maps the general equilibrium relationship among change in resource endowments, cultural endowments, technology and institutions.