Institutional economics and the three dimensions of institutions

Abstract

This article aims to discuss the different meanings given to the term “institution”. Although the definitions of institution have found some consensus around the idea of rules of behavior, too often it is not clear the object to which the authors refer when they speak of institutions. Thus, we highlight three institutional dimensions, or directions given to the term institution, which are found in the literature: (i) institutions as rules of the game; (ii) institutions as mental models; and (iii) institutions as organizations. Thus, a distinction between the old and the new Institutional Economics is increasingly difficult to draw, precisely because of the confusion of these institutional dimensions in a single term. Finally, we see the usage of that term by contemporary institutionalists as Hodgson and Chang moves quite fluidly between these institutional dimensions.