Institutionality, understood as the group of norms and formal and informal rules Lhal regulate a certain community, can help impelling and increasing the rural development or on the other hand, stopping it; it can or cannol allow people's parlicipation; it can block rural communilies ' organization and expression; which can be seen in economic, social and cultural lack. These tapies have been explored in this paper having a direct con tact with the rural communities of the small Lown Paipa (Boyacá) and they have been complemenled wilh the theoretical revision at bibliographicallevel on the tapies of the ins li tu tionali t y and th e sus tainable rural developmenl. Given the importance of the rural families se ttled in these terrilories of small properties and peasant economy, the reproduction of their own subsistence, the conlribulion lo the production of food for the urban populalion and supply of necessary manpower in rendering services and in the national industry, it was found that the economic and social lacks on the parl of the population are observed in high poverly r ates, due to little consumption and accumulation capacity, because the prívate properly based on lhe small properly us ed in agricultura! ac livilies does nol generate enough income to finance feeding, education, health , housing, recreation and much less saving. On the other hand . the produc tion of rural goods and services is sold or exchanged in the markel al very low prices even below the produclion costs, and so the wealth is transferred from the countryside to the city, reproducing lhe circle of Lhe rural poverly where existent institulionalily does not allow the rural inhabitants' participa tion in the decisionmaking, among other things , because they lack of organization and leader ship and bec ause institutionality is tr a dition ally designed and implemented withoul consulting their opinion .