Institutions are the services your Government provides to the Pops. Those can be schools and hospitals, but also conscription and tax offices, so the blade is always double-edged.
While Laws are political hot buttons with your Interest Groups, Institutions are a side effect of those Laws, and it’s not as politically fraught to expand your pre-existing health care system as it is to establish or dismantle it. But the Laws that bring an Institution into existence also govern what side effects they have, and Interest Groups will care a lot about those.
Bureaucracy comes from Government Administration buildings, which employ Clerks and Bureaucrats that consume Paper (and later on other goods, like Telephones) in the process. The more Government Administration buildings you have, the more and larger Institutions you can operate at once, as all Institutions operate on Bureaucracy.
The cost of Institutions, or the cost of one level of an Institution, is dependent on the size of the population across your Incorporated states. An important aspect of Institutions is that the effects and benefits they apply only affect Incorporated parts of your country - if you have any colonial frontiers, contested territory, or recently annexed land you haven’t Incorporated yet, these do not pay taxes to you nor do they cost you Bureaucracy, but they also can’t access your awesome hospitals.
Currently planned Institutions are:
School System - educates your populace,
Health System - increases your population health,
Police - decreases the effects of Turmoil,
Workplace Safety - reduces workplace mortality,
Social Security - impacts how poor your population can get,
Home Affairs - counteracts revolutionary sentiment,
Conscription - lets you recruit civilians as conscripts during wartime,
Colonial Affairs - advances your colonial frontiers.
The Bureaucracy you invest into Institutions can be redistributed as needed, but this takes time. So make sure to plan ahead, as Bureaucracy is needed to both establish and operate these Institutions.