George Soros has pledged a donation from his Open Society Institute of $50m (£30m) over ten years to establish the Institute for New Economic Thinking (INET), which will examine the policy challenges that lie ahead following the economic crisis and the need to develop fresh approaches to economic theory.

The institute will make research grants, convene symposia and establish a journal. Scholars will explore the implications of the financial crisis for regulatory policy. The first round of research grants will be made before the end of 2009 to cutting-edge scholars working with leading universities around the world.

Soros, a long-time critic of classical economic theory, said: “The entire edifice of global financial markets has been erected on the false premise that markets can be left to their own devices. We must find a new paradigm and rebuild from the ground up. I decided to sponsor INET to facilitate the process. I hope others will join me.”

INET's founding advisory board members include Nobel laureates Sir James Mirrlees, George Akerlof, Joseph E. Stiglitz and Michael Spence.

As Soros is both an INET benefactor and the proponent of a particular theory, Reflexivity, he will recuse himself from the grant making process. "While I hope reflexivity will be one of the concepts examined, there are numerous alternatives to the prevailing dogma that must be explored," Soros added.

The first INET conference will be at King's College, Cambridge on April 9-11 2010.