This paper is aimed at discussing the role of institutions in explaining policy outcomes in rural development. After a discussion of the theoretical framework, we have proposed a model to understand and analysing why bad policies persist over time and what are the effects on policy institutions of the main driving forces which are operating in the European context and are going to influence the process of policy reform. To make this analysis, we took into account of the principal research findings developed in the last years on design and delivery of RD policies. More generally, we can say that delivery includes rules, procedures, administrative and technical structures which are needed to make operational the RDP strategies. The absence of solid and efficient institutions cause high transaction costs, widespread rent-seeking, inequality and lack of trust. If this is true, then the question to be somewhat explained is why do some systems choose and maintain these dysfunctional institutions? Specific lessons come from particularly innovative experiences which have been experimented in different countries. We would refer in particular to significant modes of delivery which challenged the traditional way of functioning of delivery systems in Europe. Some of the most known experiences were the Contracts territorial d’Exploitation (CTEs) in France and Integrated Territorial Projects (ITPs) in Italy, both set up in the previous programming period 2000-2006. In the most recent programming phase (2007-2013), an interesting experience is provided by the Global Farming Contract (GFC), from the Catalonia RDP. “Dysfunctional institutions” have also been considered one of the main causes of difficulties and sometimes very limited outcomes of policies implemented in Italian southern regions in 2000-2006 period by Structural Funds. In a specific section we will try to examine main derivers of change and their possible role in improving the functioning of institutions involved in design and delivery of policy.