To understand institutions one needs to know what they are, how and why they are crafted and sustained, and what consequences they generate in diverse settings. Understanding anything is a process of learning what it does, how and why it works, how to create or modify it, and eventually how to convey that knowledge to others. Broadly defined, institutions are the prescriptions that humans use to organize all forms of repetitive and structured interactions including those within families, neighborhoods, markets, firms, sports leagues, churches, private associations, and governments at all scales. Individuals interacting within rule-structured situations face choices regarding the actions and strategies they take, leading to consequences for themselves and for others.
The opportunities and constraints individuals face in any particular situation, the information they obtain, the benefits they obtain or are excluded from, and how they reason about the situation are all affected by the rules or absence of rules that structure the situation. Further, the rules affecting one situation are themselves crafted by individuals interacting in deeper-level situations. For example, the rules we use when driving to work every day were themselves crafted by officials acting within the collective-choice rules used to structure their deliberations and decisions. If the individuals who are crafting and modifying rules do not understand how particular combinations of rules affect actions and outcomes in a particular ecological and cultural environment, rule changes may produce unexpected and, at times, disastrous outcomes.
Thus, understanding institutions is a serious endeavor. It is an endeavor that colleagues and I at the Workshop in Political Theory and Policy Analysis have been struggling with for at least three decades. After designing multiple research projects; writing numerous articles; developing ideas in the classroom; learning from eminent scholars in the field, from students, and from colleagues; and making diverse attacks on this problem, it is time to try to put thoughts on this subject together within the covers of a book, even though I am still not fully satisfied with my own understanding. Consider this a progress report on a long-term project that will be continued, I hope, by many others into the future.