Local institutions are commonly referred to as mediating factors that govern the relationship between a community and the natural resource base upon which it depends. However, conventional agricultural research and extension approaches have had limited impact in positively influencing the role of institutions in natural resource management (NRM). In this paper we discuss the role of Integrated Agricultural Research for Development (IAR4D) in by-law enactment, implementation and compliance in southwestern Uganda, and the potential benefits of the IAR4D approach for the development of local-level institutions. Although the level of awareness of the enacted by-laws was highest in the conventional sites, compliance was highest in the innovation platform (IP) villages. With the multi-stakeholder participation of the IAR4D approach in the IPs, there was a conducive environment in which to formulate and implement new by-laws, such as those relating to the harvesting and marketing of produce. IAR4D was found to have the potential to empower individual farmers through their interactions with each other, as well as to increase inter-institutional interactions for increased information sharing among stakeholders, thus building social capital for collective action.