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1/ Douglas North's 1991 Journal Article "Institutions" is a fascinating look at the importance and role of institutions. According to North, Institutions from firms to government to religions provide the incentive structure of the econonmy. 
2/ Institutions are necessary to constrain human interaction because they facilitate cooperation and coordination when it wouldn't make sense under a one-off prisoner's dilemma scenario
3/ As specialization and division of labor developed, institutions that permitted low cost transacting were increasingly important
4/ In game theoretic terms, effective institutions raise the cost of defection. In transaction coster terms, institutions reduce the txn costs of exchange so that gains from trade are realizable.
5/ In early hunter gatherer societies, transaction costs were minimized due to the existence of social trust and kinship. You don't screw over you friends without getting kicked out of the tribe.
6/ However as trade expanded by a single village, kinshp networks fail to scale and so more resources need to be devoted to accurate measurement (am I getting what I think I'm getting) and enforcement (do I have recourse if I don't)
7/ The growth of long distance trade introduced the principal/agent problem - the incentives of the person financing the voyage do not perfectly line up with the captain and crew
8/ It also presented a problem of contract enforcability in alien parts of the world, inlcuding protection from goods and services.
9/ The East India Company, as an example, solved this by partnering with the British government to establish their own enforcement mechanisms in trading ports (whether the people there wanted them or not)
10/ Democracy was an important "technology" in that it allowed stronger propert rights. With a single king or dioctator, property rights were eventually violated, usually to pay back debts from starting wars.
11/ The existence of strong intitutions like democracy and property rights are necessary for Industrial development. Manufacturing requires enormous startup costs to be efficient so entrepreneurs needed strong property rights to justify the investment.
12/ The hyperspecialized services economies that arose in the 20th century necessitate strong institutions to realize the enormous gains from specialization and trade.
13/ Part of the exciting promise of blocklchains/DAOs/smart contracts is reliable institutions with dramatically lower transaction costs.
