“Institutions are the humanly devised constraints that structure political, economic, and social interaction. They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal rules (constitutions, laws, property rights). Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange.”

—  Douglass C. North

Douglass North. (1991). "Institutions." Journal of Economic Perspectives, 5(1): 97-112; Abstract

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Douglass C. North18
American Economist 1920–2015

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Douglass C. North photo

“Institutions are the humanly devised constraints that structure political, economic, and social interactions. They consist of both informal constraints (sanctions, taboos, customs, tradition, and code of conduct) and formal rules”

Douglass C. North (1920–2015) American Economist

constitutions, laws, property rights
Source: Institutions (1990), p. 97; As cited in: Oliver E. Williamson (1996) The Mechanisms of Governance. p. 4

“The rights of individuals to the use of resources (i. e., property rights) in any society are to be construed as supported by the force of etiquette, social custom, ostracism, and formal legally enacted laws supported by the states' power of violence of punishment. Many of the constraints on the use of what we call private property involve the force of etiquette and social ostracism. The level of noise, the kind of clothes we wear, our intrusion on other people's privacy are restricted not merely by laws backed by police force, but by social acceptance, reciprocity, and voluntary social ostracism for violators of accepted codes of conduct.”

Armen Alchian (1914–2013) American economist

Source: Economic Forces at Work, 1977, p. 129-130 ; as cited in Eggertsson (1990; 34)

Geoffrey Hodgson photo

“We shall here define the market as a set of social institutions in which a large number of commodity exchanges of a specific type regularly take place, and to some extent are facilitated and structured by those institutions. Exchange as defined above, involves contractual agreement and the exchange of property rights, and the market consists in part of mechanisms to structure, organize and legitimate these activities. Markets, in short, are organized and institutionalized exchange. Stress is placed on those market institutions, which help to both regulate and establish a consensus over prices and, more generally, to communicate information regarding products, prices, quantities, potential buyers and potential sellers.”

Geoffrey Hodgson (1946) British economist

Source: Economics and Institutions, 1988, p. 174

Ilham Aliyev photo

“We have had significant achievements in political, economic and social spheres. A transparent public relations system has been created in our country, and the activity of democratic institutions, human rights and freedoms have been ensured. Legislation that meets international requirements, effective operation of specialized institutional structures, and ensuring transparency in public administration are the successes of our anti-corruption policy.”

Ilham Aliyev (1961) 4th President of Azerbaijan from 2003

President Ilham Aliyev&#x27;s opening letter to participants of the Third Meeting of the Heads of Anti-Corruption Organizations and Ombudsmen of the Economic Cooperation Organization Member States (6 June 2017) http://www.today.az/print/news/politics/161995.html <br class="br">Anti-corruption policy

“Prophets do not help responsible Christian persons who seek to gain political and economic power as a means to serve the public good within the constraints of political, economic, medical, or other institutions.”

James Gustafson (1925) American academic

Source: "Varieties of Moral Discourse: Prophetic, Narrative, Ethical and Policy", p. 55

“Social, political and economic institutions have become larger, considerably more complex and resourceful, and prima facie more important to collective life. Many of the major actors in modern economic and political systems are formal organizations, and the institutions of law and bureaucracy occupy a dominant role in contemporary life.”

James G. March (1928–2018) American sociologist

Source: Rediscovering institutions, 1989, p. 1-2

“Social, political and economic institutions have become larger, considerably more complex and resourceful, and prima facie more important to collective life. Many of the major actors in modern economic and political systems are formal organizations, and the institutions of law and bureaucracy occupy a dominant role in contemporary life.”

Johan Olsen (1939) Norwegian political scientist

James G. March and Johan Olsen, (1989) Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press. p. 1-2

Geoffrey Hodgson photo

“Market exchange requires a combination of both state and customary institutions. For any developed system of commodity exchange there must be a legal system inscribing and protecting rights to individual or corporate property. There must be a body of contract law with criteria for distinguishing between voluntary and involuntary transfers of goods and services, and courts to adjudicate in such matters. However, the evolution of law is not simply a matter of legislative construction; a great deal of law grows out of custom and precedent. Property and contract law are not exceptions. Consequently, the existence of property and exchange is tied up with a number of legal and other institutions, e. g. government, political system, and common societal values.”

Geoffrey Hodgson (1946) British economist

Source: Economics and Institutions, 1988, p. 150

Paul DiMaggio photo

“Organizations compete not just for resources and customers, but for political power and institutional legitimacy, for social as well as economic fitness.”

Paul DiMaggio (1951) American sociologist

Source: "The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields," 1983, p. 150.

“Many formal organizational structures arise as reflections of rationalized institutional rules. The elaboration of such rules in modern states and societies accounts in part for the expansion and increased complexity of formal organizational structures. Institutional rules function as myths which organizations incorporate, gaining legitimacy, resources, stability, and enhanced survival prospects. Organizations whose structures become isomorphic with the myths of the institutional environment-in contrast with those primarily structured by the demands of technical production and exchange-decrease internal coordination and control in order to maintain legitimacy. Structures are decoupled from each other and from ongoing activities. In place of coordination, inspection, and evaluation, a logic of confidence and good faith is employed.”

John W. Meyer (1935) Sociologist and professor at Stanford University

Meyer, John W., and Brian Rowan. &quot; Institutionalized organizations: Formal structure as myth and ceremony http://www.sasse.se/akademiska/310/meyer%20rowan.pdf.&quot; American journal of sociology (1977): 340-363.

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