Institutions are rules and norms held in common by social actors that guide, constrain and shape human interaction. Institutions can be formal, such as laws and policies, or informal, such as norms and conventions. Organizations – such as parliaments, regulatory agencies, private firms and community bodies – develop and act in response to institutional frameworks and the incentives they frame. Institutions can guide, constrain and shape human interaction through direct control, through incentives, and through processes of socialization. See also Institutional capacity.
INSTITUTION
