As it's come up a few times I want to address the feedback that certain Institutions, like schools and hospitals, are more suited to being Buildings than nation-wide Institutions.
There is nothing fundamental in the game's core mechanics that prevents this. Institutions have an effect on states, and Buildings can be scripted to have the exact same effect on states. Furthermore, Buildings can take varied input goods (such as medicine for hospitals and small arms for police stations) and require varied Pop professions, such that building Hospitals could employ more Academics (Doctors) than Bureaucrats, and so on. A modder could replace any Institution in the game with the equivalent set of Buildings with no adverse side effects in a couple of hours. Buildings can require Laws in order to be constructed and have Production Methods that can only be turned on during different Laws, so all of the functionality in the current system can be ported over to the Buildings system. So why haven't we done this?
There are a number of reasons, actually. The foremost of them is that enacting a Law is a promise. If the Petit-Bourgeoisie are upset at the lack of Police and Poor Houses to keep the rabble off the streets, they'll be pleased when you enact a Law that enable these Institutions, and once enabled you have to pass a Law to abolish it to get rid of it and its administrative costs. If we instead had a Police Station building and a Poor House building then the P-Bs would be pleased once the Laws that permits you to build them are passed, but you're under no obligation to build and pay for them. This is pretty cheesy and creates a disconnect between the political gameplay and the economic gameplay.
Another, related, aspect is that Bureaucracy is intended to discourage sprawl and reward countries who choose to build tall. If you're a militaristic superpower who aggress your way across a continent, you're going to have a hard time extending all these guaranteed government services to your newly annexed lands. "Incorporation" of a state is a permanent choice of declaring a state an official core part of your nation, thereby taxing the population in exchange for extending all your Institutions to them. All this costs Bureaucracy, so smaller, tighter countries have a much easier time providing services to their population than vast empires do. Again, this dynamic doesn't work if you can just choose who gets access to how many government services and who doesn't.
The final major reason is the large amounts of frankly boring micro this would require many countries to engage in. Chances are very good that once you have a Health System you're going to want to extend its function to at least most of your states. Spamming Hospitals in every state and then keeping up on what level they are in order to ensure they provide the right amount of health care to all the people who live there sounds awesome on paper, is a terrible game experience for larger countries, and frankly isn't a very interesting choice. Now multiply this experience with all the different Institutions you'd rather have as Buildings.
Having said all this the system is very flexible, and if we find in playtest that, the above reasons notwithstanding, a certain Institution would in fact work better as a Building it is relatively easy to rework it!
