North (1981) defines institutions as “a set of rules, compliance procedures, and moral and
ethical behavioral norms designed to constrain the behavior of individuals in the interests of
maximizing the wealth or utility of principals” (p. 201-202). A key word that this and other
definitions share is constraints. Thus constitutions or electoral rules are good examples of
institutions, but good policies chosen by dictators who have a free hand are not. But there is
another essential aspect of institutions noted even in dictionaries: the constraints need to be
reasonably permanent or durable. Indeed, transitory “constraints” would not necessarily bind, and
may be changed by those who do not like them. This permanency or “depth” of institutions has
been relied on, for example, to justify using history as an instrument for institutional quality today
(Rodrik et al. 2002). Thus legal systems or electoral rules look more like “institutions” when they
are actually used over time, in contrast, for example, to the presidencies of Bill Clinton or George
Bush, which most people would not regard as “institutions.”