This article depicts the main Brazilian clusters specialized in traditional industries in a way that accounts for two discriminating variables usually treated as closely intertwined features: the extent of Marshallian external economies and the development of institutions devoted to local governance. The inquiry into different case studies suggests that extensive agglomeration economies do not prevent from the failure of collective actions clarifying that the presence of agglomeration economies does not necessarily imply an efficient local governance. Instead, some embryonic clusters are endowed with those social traits- such as cooperation and trust among final producers- and institutional assets usually associated to the industrial district model. Since the two system characteristics identified – institutional density and internal complexity- may well be detached, a typology of clusters is introduced as a guide for local economic policy.