This chapter deals with the ways in which the concepts of institutions and design can be related. Though the literature on "institutional design" often focuses on the rational design of more or less formal institutions, I lay the emphasis on institutions as contexts, and not only as objects, of design. This orientation has affinity to what Linder and Peters (1992) call the contextual approach to policy design, advocated by for example Bobrow and Dryzek (1987). By institutions as contexts I mean both formal institutional structures and rules such as those contained in policy making bodies, and more informal social institutions which structure how people think and behave.