A primary aim of this paper is to establish some workable meanings of key terms including
institution, convention and organization, by drawing on insights from several academic
disciplines. Institutions are defined broadly as systems of established and prevalent
social rules that structure social interactions. This, in turn, prompts some examination
of the concept of a rule, and why rules are followed. The paper then addresses the
controversial distinction between institutions and organizations. Douglass North’s
influential formulations of these terms are criticized for being incomplete and misleading.
Here an organization is treated as a type of institution involving membership and
sovereignty. Further types of institution are also considered, including the difference
between self-organizing and other institutions, and the differences in degrees of
sensitivity to varying personality types of the agents involved.