The Definition and Purpose of Political Institutions

How They Impact Law, Economy and Culture

US Capitol and blue sky
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Political institutions are the organizations in a government which create, enforce, and apply laws. They often mediate conflict, make (governmental) policy on the economy and social systems, and otherwise provide representation for the population.

In general, democratic political regimes are divided into two types: presidential (headed by a president) and parliamentary (headed by a parliament). Legislatures built to support the regimes are unicameral (only one house) or bicameral (two houses—for example, a senate and a house of representatives or a house of commons and a house of lords). Party systems can be two-party or multiparty, the parties can be strong or weak depending on their level of internal cohesion. The political institutions are those bodies—parties, legislatures, and heads of state—which make up the whole mechanism of modern governments.

Parties, Trade Unions, and Courts

In addition, political institutions include political party organizations, trade unions, and the (legal) courts. The term 'Political Institutions' may also refer to the recognized structure of rules and principles within which the above organizations operate, including such concepts as the right to vote, a responsible government, and accountability.

Political Institutions, in Brief

Political institutions and systems have a direct impact on the business environment and activities of a country. For example, a political system that is straightforward and evolving when it comes to political participation of the people and laser-focused on the well-being of its citizens contributes to positive economic growth in its region.

Every society must have a type of political system so it may allocate resources and ongoing procedures appropriately. Along with the same concept, a political institution sets the rules in which an orderly society obeys and ultimately decides and administers the laws for those that do not obey appropriately.

Types of Political Systems

The political system consists of both politics and government and involves the law, economy, culture and additional social concepts.

The most popular political systems that we know of around the world can be reduced to a few simple core concepts. Many additional types of political systems are similar in idea or root, but most tend to surround concepts of:

  • Democracy: A system of government by the whole population or all the eligible members of a state, typically through elected representatives.
  • Republic: A state in which supreme power is held by the people and their elected representatives, and which has an elected or nominated president rather than a monarch.
  • Monarchy: A form of government in which one person reigns, typically a king or a queen. The authority, also known as a crown, is typically inherited.
  • Communism: A system of government in which the state plans and controls the economy. Often, an authoritarian party holds power and state controls are imposed.
  • Dictatorship: A form of government where one person makes the main rules and decisions with absolute power, disregarding input from others.

The Function of a Political System

In 1960, Almond and Coleman gathered three core functions of a political system which include: 

  1. To maintain the integration of society by determining norms.
  2. To adapt and change elements of social, economic, and religious systems necessary for achieving collective (political) goals.
  3. To protect the integrity of the political system from outside threats.

In modern day society in the United States, for example, the main function of the two core political parties is seen as a way to represent interest groups and constituents and to create policies while minimizing choices. Overall, the idea is to make legislative processes easier for people to understand and engage with.

Political Stability and Veto Players

Every government seeks stability, and, without institutions, a democratic political system simply cannot work. Systems need rules to be able to select political actors (the nomination process). The leaders must have fundamental skills about how the political institutions work and there must be rules about how authoritative decisions are made. The institutions constrain political actors by punishing deviations from institutionally prescribed behaviors and rewarding appropriate behavior.

Institutions can resolve collection action dilemmas—for example, all governments have a collective interest in reducing carbon emissions, but for individual actors, making a choice for the greater good makes no good sense from an economic standpoint. So, it must be up to the federal government to establish enforceable sanctions.

But the main purpose of a political institution is to create and maintain stability. That purpose is made viable by what American political scientist George Tsebelis calls "veto players." Tsebelis argues that the number of veto players—people who must agree on a change before it can go forward—makes a significant difference in how easily changes are made. Significant departures from the status quo are impossible when there are too many veto players, with specific ideological distances among them.

Agenda setters are those veto players who can say "take it or leave it," but they must make proposals to the other veto players that will be acceptable to them.


  • Almond, Gabriel Abraham, and James Smoot Coleman, eds. "The Politics of the Developing Areas." Princeton: Princeton University Press, 2016 (1960). Print.
  • Armingeon, Klaus. "Political Institutions." Handbook of Research Methods and Applications in Political Science. Eds. Keman, Hans and Jaap J. Woldendrop. Cheltenham, UK: Edward Elgar Publishing, 2016. 234–47. Print.
  • Beck, Thorsten, et al. "New Tools in Comparative Political Economy: The Database of Political Institutions." The World Bank Economic Review 15.1 (2001): 165–76. Print.
  • Moe, Terry M. "Political Institutions: The Neglected Side of the Story." Journal of Law, Economics, & Organization 6 (1990): 213–53. Print.
  • Tsebelis, George. "Veto Players: How Political Institutions Work." Princeton, NJ: Princeton University Press, 2002. Print.
  • Weingast, Barry R. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development." Journal of Law, Economics, & Organization 11.1 (1995): 1–31. Print.