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According to the United Nations General Assembly, Cambodia and Laos belong to the group of the Least Developed Countries (LDCs) that are characterized as most severely hit by obstacles towards their development. In the following analysis, the underlying perspective is that of institutional economics, which states that underdevelopment is one result of an inefficient institutional framework. Against this background, the strategies both countries applied with the intention to upgrade from that status will be examined and assessed with regard to their institutional functionality.