INSTITUTIONS

The rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction. Institutions therefore structure incentives in human exchange, whether political, social, or economic. Institutions can be formal (i.e. devised rules) or informal (i.e. socially transmitted conventions and codes of behaviour). Thus, they can be created, or may simply evolve over time, as does the common law. Institutions determine the opportunities in a society; organisations are created to take advantage of those opportunities, and as organisations evolve, they alter institutions. Scialabba (1998)