How does institutional change take place? This question poses a number of challenges for scholars working in the New Institutional tradition. We first discuss how institutions have been conceptualized as either “rules of the game” or as “equilibria.” The rules of the game perspective suggests that institutions perform useful functions and change when circumstances make these functions obsolete except when transaction costs render this change too costly. The institutions as equilibria perspective, in contrast suggests that both cooperation and conflict drive institutional change and that institutional change need not be efficient. We propose a framework for simultaneously depicting institutional change driven by both cooperation and conflict. Finally, we discuss the role individuals can play in shaping institutional change.