The Madras Institute of Development Studies (MIDS) was founded by Dr.Malcolm S Adiseshiah and Mrs. Elizabeth Adiseshiah, in January 1971, shortly after Dr.Adiseshiah's retirement as Deputy Director-General of UNESCO.
In 1976 the Government of India through the Indian Council of Social Science Research (ICSSR), New Delhi, sent a mission to study the possibility of developing MIDS into a national institute of social science research. On the recommendations of the mission the Institute was reconstituted as a National Institute in March 1977 under the joint sponsorship of the Government of India through the ICSSR and the Government of Tamil Nadu. The trustees gifted to the reconstituted National Institute its land and buildings, its library, furniture and equipment and a cash endowment. The Reserve Bank of India established a Chair in applied research in regional economics in the Institute in 1985.