A concept · The Fabric of Society · Society
Institutions
The durable rules of the game that outlast any player.
The rule is plainly not working. Everyone at the table says so, in private. The system for approving expenses, the way the league picks its referees, the process for changing the process itself: all agreed to be broken, all still standing years later. The people who set it up have left. The people it costs cannot move it, and the people it favours call it common sense. What keeps a rule alive when the people who wrote it are gone?
What Institutions means
Institutions are the durable rules of the game, formal and unwritten, that shape how people deal with each other and outlast any single player. Not the building, not the organisation: the rules the organisation plays by. That is the definition. Owning it changes what we look at when something is stuck. We start to ask who a rule quietly favours before we ask whether it is fair, because the two questions have different answers. We stop expecting a bad rule to fall simply because it is bad. Before, a broken process was a puzzle about efficiency. After, we can see it as a settlement that someone is winning, and we know that changing it means changing who wins.
Not to be confused with
Institutions are not organisations. An organisation is a thing with a building and a payroll: a bank, a court, a school. An institution is the rule that outlasts any of them: property, contract, the vote. Organisations are the players; institutions are the rules of the game.
Institutions examples: where it shows up
- At work: the process that survives three reorganisations is not the best one; it is the one somebody senior is still winning by.
- With money: property rights are why we build on land we will not see the return from for twenty years, and where they are weak nobody does.
- In the news: the reform everyone polls in favour of stalls for a decade, and the people it would cost are the ones who sit where it is decided.
Where it sits
Concept 5 of 5 in The Fabric of Society, a journey in the course How the World Works.
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Knowing it isn't owning it.
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