AbstractThe principles of integrated coastal area management have been widely adopted and advocated by the international community. However, integrated coastal management has been less successful in practice and, in many areas, conflicts over resource use still prevail. This chapter explores the causes for such conflicts from the perspective of New Institutional Economics (NIE). It argues that conflicts are not only the result of competition for resources, but predominantly the outcome of institutional failures, that is, the ability of institutions in place (if not their simple absence) to address coastal zone issues. The case of shrimp culture development in India is used as an illustration of the NIE concepts presented. Decentralization and devolution, when meeting specific institutional requirements identified with NIE as a framework of analysis, are suggested as a suitable reform process to stimulate environmentally and socially sustainable coastal zone development. In this respect, sectoral capacity building of user groups followed by strengthening of local government capacity to integrate and adequately address sectoral concerns are considered as practical measures to improve the efficiency of current coastal zone management schemes.