The principles of justice for institutions differ from the principles of justice for individuals. An institution is “a public system of rules which defines offices and positions with their rights and duties, powers, and immunities, and the like” (47). An institution’s rules—and each person’s participation in them—are the result of an agreement based on a public understanding of what is just and unjust. Therefore, an institution is measured as just or unjust by how it is effectively and impartially administered. In this way, formal justice is adherence to a system, the strength of which depends on the justice of the system’s institutions.

The two principles of justice are the equal liberty principle and the difference principle. These apply to both individuals and the institutions that govern society.

All basic liberties are equal under the first principle of justice. They include political liberty, freedom of speech and assembly, liberty of conscience and freedom of thought, freedom of the person, the right to hold personal property, and freedom from arbitrary arrest and seizure. The second principle governs the distribution of income and wealth, and the design of institutions that assign different authorities and responsibilities in society.