What are informal institutions?

In the Social Sciences, a institutions refer to the "rules of the game." Institutions define and limit the choice sets of actors and thus serve as the framework for human interaction (North 1990: 4). Institutions are ubiquitous in social life because they narrow an otherwise unbounded number of options for actors trying to navigate myriad interactions with other actors and their environment. These constraints also help actors predict the behavior of other agents when making strategic decisions. While often conceptualized as the formal rules of order such as laws constitutions and property rights, these formal constraints compose a small proportion of rules that govern human interaction. In almost all social systems, actor choice is shaped by the complex interaction between formal and informal institutions. For more see North or Ostrom.