Overview

Institutions are the “rules of the game.” They are the formal and informal structures that govern political life. Without them, politics is just a street fight.

Core Idea

The core idea is stability. Institutions persist over time, outlasting individual politicians. They constrain power and make behavior predictable.

Formal Definition

  • Formal Institutions: Written rules (Constitution, Laws), Organizations (Congress, Supreme Court).
  • Informal Institutions: Unwritten norms (Corruption, Patronage, “The way things are done”).

Intuition

  • The Building: The White House is a building.
  • The Institution: “The Presidency” is an institution. It has powers and traditions that exist regardless of who is President.

Examples

  • Separation of Powers: Dividing institutions (Legislative, Executive, Judicial) so no one gets too powerful.
  • The Rule of Law: The institution that says laws apply to everyone, even the King.
  • Political Parties: Institutions that organize voters and candidates.

Common Misconceptions

  • Misconception: Institutions are just buildings.
    • Correction: They are patterns of behavior. If everyone ignores the Supreme Court, the institution is dead, even if the building stands.
  • Misconception: They are unchangeable.
    • Correction: They evolve (Institutional Decay or Reform), but slowly.

Applications

  • Nation Building: You can’t just hold an election; you have to build institutions (courts, police) for democracy to survive.
  • Economic Growth: Strong institutions (property rights) are the best predictor of wealth (Acemoglu).

Criticism and Limitations

  • Rigidity: Institutions can be slow to adapt to new problems.
  • Capture: They can be taken over by special interests.

Further Reading

  • Why Nations Fail by Acemoglu and Robinson
  • Institutions, Institutional Change and Economic Performance by Douglass North