The article analyzes factors which affect economic structure and its development. The factors on which production of the country depends are discussed and gives three variables, the technology available, institutional framework and the structural relationship that exists among that country's population, resources, and technology. The article author says that by modifying any one of these variables, the other two remaining constant, the national product of a society can be increased or decreased. The agrarian reform in Italy are discussed in this regard. It further mentions that the institutionalists, from whom the theory expounded above is derived, until recently, approached the problem of production and development as a function of only two variables, technology, the driving force and institutions, the retarding force. Problem of unemployment in Italy and its possible solution is discussed here in this regard. The importance of "appropriateness" of raw material to the existing population and technology, with its drawbacks has been discussed in detail. The article concludes with the view that when viewed in the light of the theoretical framework presented, the problems connected with economic development become much clearer and it is possible to conclude that increases in a country's production of goods and services can be obtained in three ways, by altering the existing institutional framework, or by introducing new and better techniques or by modifying the quantitative relationships among that country's population, resources, and technology.