Why Institutions Are Important in Economics

(Mike Segar/Reuters)
They promote and embody knowledge, practices, and norms that don’t show up in statistics.

NRPLUS MEMBER ARTICLE I nstitutions matter. In his latest book, A Time to Build, Yuval Levin outlines the importance of institutions for providing cultural structure. He offers a handy definition of institutions: “the durable forms of our common life. They are the frameworks and structures that we do together.” According to Levin, many of these institutions have withered, which has led to increased social turmoil and political anxiety.

Various non-state institutions help ensure a diffusion of power and provide crucial contexts for the flourishing and self-understanding of individuals. The fate of institutions also relates to contemporary debates about policy reform on the right. Current-day “populists”


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