INSTITUTIONS: INTRODUCTION

Institutions are normative social rules, that is, the rules of the game in a society, enforced either through law or through other mechanisms of social control that shape human interaction.

Institutions as normative patterns of behavior serve to (partially) solve the problem of cooperation in a society by providing a more or less permanent platform of conflict resolution. They define the rules of the socioeconomic game, that is, the strategies that individuals are allowed to employ in order to follow and solve their problems. The existence of social institutions provides the first step toward overcoming the Hobbesian problem of social order, the second being the cooperation of individuals via exchange within institutional framework.

In both the economic and sociological literatures, the term “institution” is often used to designate organizations of every kind. To avoid confusion, it is useful to distinguish sharply between institutions constituting the rules of the game and organizations as corporate actors, that is, as groups of individuals bound by some rules designed to achieve a common objective (or to solve a common problem). Organizations as “corporate actors,” as Coleman (1990a) calls them, are collective units characterized by a set of procedural rules that define the coordination of the individual members who have pooled their resources for a joint purpose.