01 · The discovery
The idea, in everyday language
Institutions are the rules and organisations that shape social life: courts, property rights, political representation and limits on power. They influence whether people can invest, cooperate and expect to keep the results of their work.
The laureates used historical evidence and theory to study how different institutions emerged and persisted. Colonial experiences provided important comparisons. Their work also explains why powerful groups may defend arrangements that benefit themselves while limiting wider prosperity.
Why it matters
The research made political power and institutional history central to debates about development, alongside resources, geography and technology.
