Most policies and projects designed to stimulate the growth and diversity of national seed systems place their hopes on the emergence of viable seed enterprises. Such enterprises include everything from conventional commercial seed companies to community-level endeavours. Institutional factors are a key to understanding this type of seed enterprise development and these factors are the principal focus of this paper.

The analysis draws on literature from New Institutional Economics and emphasises the importance of information, and its attendant transaction costs, in understanding enterprise development. The efficient interchange of information is supported by the development of norms and trust, often associated with the concept of social capital. In addition, adequate incentives must be provided for undertaking the various tasks of seed provision.