No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Ten: It’s all About the Institutions! 246 7. Institutions are the humanly devised constraints that structure human interaction. They are made up of formal constraints (rules, laws, constitutions) and informal constraints (norms of behavior, conventions, and self-imposed codes of conduct). Institutions help entrepreneurship in that they reduce the uncertainty of the future by providing constraints that reduce the possible outcomes. A. formal B. formal C. informal D. informal