Institutional understanding of society and theoretical legacy of institutionalism

Actuality dilemma - how a complex system of formal law may be applied and why people tend to obey the rules, with lack of clear incentives or disincentives - in the spotlight of confrontation sets formal and informal institutions. There are totally different opinions on the importance of informal institutions in the formation of the legal system. Hence arise and the conflicting views: "Law is older than legislator" and "It is misconception that the law can be reduced to practice". However, it is evident that informal institutions, with greater or lesser extent, define the limitations of the formal institutions and determine the actual effects. The primary purpose of this paper is to show that the process of creation of law is not entirely spontaneous, i.e. that law cannot be reduced to only a custom.