1800s: Martineau · Tocqueville · Marx · Spencer · Le Bon · Ward · Pareto · Tönnies · Veblen · Simmel · Durkheim · Addams · Mead · Weber · Du Bois · Mannheim · Elias An institution is a humanly devised structure of rules and norms that shape and constrain social behavior.
Historians study and document the founding, growth, decay and development of institutions as part of political, economic and cultural history.
[15] A separate paper by Acemoglu, Robinson, and Francisco A. Gallego details the relationships between institutions, human capital, and economic development.
[16] Authors Steven Levitsky and María Victoria Murillo claim that institutional strength depends on two factors: stability and enforcement.
[19] Arthur notes that although institutional lock-in can be predictable, it is often difficult to change once it is locked-in because of its deep roots in social and economic frameworks.
"[12] Robert Keohane defined institutions as "persistent and connected sets of rules (formal or informal) that prescribe behavioral roles, constrain activity, and shape expectations.
"[2] Additionally, they specify that organizations "are institutional elements that influence the set of beliefs and norms that can be self-enforcing in the transaction under consideration.
Basic biological requirements, for reproduction and care of the young, are served by the institutions of marriage and family, for example, by creating, elaborating and prescribing the behaviors expected for husband/father, wife/mother, child, etc.
The Marxist view—which sees human nature as historically 'evolving' towards voluntary social cooperation, shared by some anarchists—is that supra-individual institutions such as the market and the state are incompatible with the individual liberty of a truly free society.
[38] Over time institutions develop rules that incentivize certain behaviors over others because they present less risk or induce lower cost, and establish path dependent outcomes.
For example, the Cournot duopoly model is based on an institution involving an auctioneer who sells all goods at the market-clearing price.
[citation needed] In political science, the effect of institutions on behavior has also been considered from a meme perspective, like game theory borrowed from biology.
[42] Scholars of this period assumed that "parchment institutions" that were codified as law would largely guide the behavior of individuals as intended.
[41] In history, a distinction between eras or periods, implies a major and fundamental change in the system of institutions governing a society.
Similarly, Brian Arthur refers to these factors as properties of non-predictability and potential inefficiency in matters where increasing returns occur naturally in economics.
[62] According to Mansfield and Snyder, many transitional democracies lack state institutions that are strong and coherent enough to regulate mass political competition.
Good enforcement of laws can be classified as a system of rules that are complied with in practice and has a high risk of punishment.
The dependence developing countries have on international assistance for loans or political power creates incentives for state elites to establish a superficial form of Western government but with malfunctioning institutions.
With political power, its centralization within a small group of individual leaders makes it easier and more effective to create rules and run an institution smoothly.
It is important for policymakers and people of higher levels within an institution to consider when looking at products that have a long term impact on markets and economic developments and stability.
Though institutions are persistent, North states that paths can change course when external forces weaken the power of an existing organization.
This change can also occur as a result of gridlock between political actors produced by a lack of mediating institutions and an inability to reach a bargain.
As an example, Lustick cites Amyx's analysis of the gradual rise of the Japanese economy and its seemingly sudden reversal in the so-called "Lost Decade".
Rather, to return Japan's economy back to the path to economic prosperity, policymakers would have had to adopt policies that would first cause short-term harm to the Japanese people and government.
Under this analysis, says Ian Lustick, Japan was stuck on a "local maxima", which it arrived at through gradual increases in its fitness level, set by the economic landscape of the 1970s and 80s.
For example, Lustick observes that any politician who hopes to run for elected office stands very little to no chance if they enact policies that show no short-term results.
Lustick himself notes that identifying the inability of institutions to adapt as a symptom of being stuck on a local maxima within a fitness landscape does nothing to solve the problem.
David Sloan Wilson notes that Lustick needs to more carefully distinguish between two concepts: multilevel selection theory and evolution on multi-peaked landscapes.
To this extent, "institutionalization" may carry negative connotations regarding the treatment of, and damage caused to, vulnerable human beings by the oppressive or corrupt application of inflexible systems of social, medical, or legal controls by publicly owned, private or not-for-profit organizations.
The term "institutionalization" may also be used in a political sense to apply to the creation or organization of governmental institutions or particular bodies responsible for overseeing or implementing policy, for example in the welfare or development.