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Mechanisms in a theory are defined here as bits of theory about entities at a different level (e.g., individuals) than the main entities being theorized about (e.g., groups), which serve to make the higher-level theory more supple, more accurate, or more general. The criterion for whether it is worthwhile to theorize at lower levels is whether it makes the theory at the higher levels better, not whether lower-level theorizing is philosophically necessary. The higher-level theory can be made better by mechanisms known to be inadequate in the discipline dealing with the lower level. Conditions for the usefulness of lower-level theorizing are proposed, with many examples from various social and physical sciences.

Institutions are staffed and are created to do the job of regulating organizations. This staffing, and all the creative work that is involved in financing, governing, training, and motivating institutional actions by that staff in organizations, has been lost in recent institutional theorizing. This staffing was central to the old institutionalism, which is why it looked so different. The argument is exemplified by applying the insights of classical institutionalists to the legitimacy of court decisions as determined by the law of evidence, to the legitimacy of competition and the destruction of other organizations by competition, to the noncontractual basis of contract in commitments to maintain competence to do the performances required in contracts, and to the failure of institutions of capitalist competition and the substitution of mafia-like enforcement of contracts in postcommunist Russia. The institutions of the new institutionalism do not have enough causal substance and enough variance of characteristics to explain such various phenomena.

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