Short answers, pulled from the story.
An institution is a humanly devised structure of rules and norms that shape and constrain social behavior. This definition appears in the work of Alexander, Titus (2025) published in Frontiers in Political Science on the 1st of May 2025.
Economics uses game theory to study how institutions survive and evolve through processes such as technological lock-in. Paul A. David wrote an article called Clio and the Economics of QWERTY in 1985 describing this process where a specific technology dominates the market despite inefficiency.
Informal institutions tend to have socially shared unwritten rules known by all inhabitants while formal institutions are codified laws enforced by third parties. Steven Levitsky and María Victoria Murillo define institutional strength through enforcement levels where weak institutions with low enforcement lead to deterioration of democratic structures.
Douglass North argued that small historical features drastically change institutional nature by having profound effects on costs of exchange and production. Daron Acemoglu, Simon Johnson, and James A. Robinson agreed with this analysis stating that economic institutions shape opportunities and constraints of investment.
James Mahoney studied path dependence in national regime change within Central America and found liberal policy choices made by leaders in the 19th century led to divergent development levels today. Once a choice is made during critical juncture it becomes difficult to return because policy choices created self-reinforcing institutions producing different outcomes for countries.