Formal and informal institutions

Formal and informal institutions are classified in terms of the formality of the rule component of an institution.

Formal institution

is an institution that can be shaped and that can only develop a binding force with the help of formal sanctions . It is usually recorded in writing. The opposite term is the informal institution.

Written rules of conduct such as laws or constitutions can serve as examples.

Informal institution

An informal institution, on the other hand, is an institution that is subject to evolutionary development and develops a high degree of binding force even without formal sanctions . Nor is it necessarily recorded in writing. The opposite term is the formal institution .

Unwritten rules of conduct such as norms , language or culture can serve as examples .

Web links

• Institution in the Gabler Wirtschaftslexikon

literature

• Gerhard Wegner , Josef Wieland (Hrsg.): Formal and informal institutions: genesis, interaction and change. Institutional and Evolutionary Economics, Volume 6, Metropolis-Verlag