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influence the characteristics of the individual and the constructivist perspective whereinstitutions influence perceptions, values, preferences and capabilities (Vatn 2005).Despite how it seems, the two may not be seen as opposed to each other. While thefirst suggests what happens in a society can be explained by looking at individualsand their choices, the other suggest it can be explained by the social structures instead(Ibid).When we understand institutions as “rules” we will find North in one end as anindividualist, defining institutions as “the rules of the game in a society” (North 1990,p.3), where institutions are just external rules establishing the way individualsinteract, with one goal in mind: to maximize their own utility (Vatn, 2005). At theopposite end Berger and Luckmann can be placed, saying that: “Institutionalizationoccurs whenever there is a reciprocal typification of habitualized actions by types ofactors”. Put differently, any such typification is an institution” (Berger andLuckmann 1967, p.54) meaning that both their individual capabilities and how theysee the world are socially constructed (Vatn 2005). With such an understanding ofinstitutions, we choose to combine the two definitions, seeing institutions as the rulesthat make up a society and defined by habitualized actions by individuals, where thereis a reciprocal relationship on how individuals influence institutions as well as howinstitutions influence individuals.Following Scott (1995), we can further categorize institutions into three differentgroups within a society - norms, conventions and legal rules (Scott 1995). Norms areacts supported by underlying values, and are typically rational oriented such as ifsomeone do this, you do that. For a norm to become social a set of “behavior” musttherefore be shared and sustained by other people (Elster 1989). If norms tell peoplewhat to do, conventions tell us how to do it and are typically there to solve acoordination problem. As an example, trying to preserve the environment can be anorm within a village, how this is done will be the conventions and practices. Finallywe have legal rules which are in many ways different from norms and conventionssince it is governed by third party sanctions, combining a certain situation with an actwhich is forbidden or required (Vatn 2005). As an example, legal rules can beexplained if someone destroys other people‟s property, a third party – the law, willgive the victim the rights to claim a compensation for his or her loss.23