Social evolution is one of the most rapidly developing areas in evolutionary biology. A main theme is the emergence of cooperation among organisms, including the factors that impede cooperation. Although animal societies seem to have no formal institutions, such as courts or legislatures, we argue that biology presents many examples where an interaction can properly be thought of as an informal institution, meaning there are evolved norms and structure to the interaction that enable parties to reach mutually beneficial outcomes. These informal institutions are embedded in the natural history of the interaction, in factors such as where and when parties interact, how long and how close they stay together, and so on. Institutional theory thus widens the scope of behavioral ecology by considering not only why animals evolve to choose the strategies they choose, but also asking both why it is that they find themselves in those particular interaction setups and how these particular interactions can be sustained. Institutions frequently enable interacting parties avoid inefficient outcomes and support efficient exchange among agents with conflicting interests. The main thesis of this paper is that the organization of many biological interactions can properly be understood as institutions that enable mutually beneficial outcomes to be achieved relative to an unstructured interaction. To do this, institutions resolve or regulate the conflicts of interests among parties. The way conflicts of interests affect the outcome depends on the structure of the interaction, which can create problems of commitment, coordination and private information. Institutional theory focuses on how to address each of these issues, typically focusing on the development of social norms, rules, and other constraints on individual behaviors. We illustrate our thesis with examples from cooperative breed and genes as within-body-mechanism-design.