When and why do institutions fail?

Living in stable and prosperous Western countries for decades I took institutions (governments, courts, banks, businesses, universities, churches, charities) for granted. However, over the past decade, I have spent more time in the Majority world, where many institutions struggle to be effective because of corruption or lack of resources. Unfortunately, in the West now many institutions are under siege, starting to fall apart, or doing significant damage. Thus, I have gained a new appreciation for just important institutions are for human flourishing. In November, I have been asked to give a talk to stimulate a discussion about this issue. Hence, I am thinking about the issue more. An article I found helpful and stimulating is this book review by Andy Crouch.

A question I have been thinking about is,
When and why do institutions fail to promote human flourishing?
I believe there are two primary reasons. Often they become intertwined. Both are associated with an inward focus rather than an outward focus.

People within the institution use (abuse) it for their own personal gain (money, power, sex).

Preserving the institution becomes a primary goal in decision making.

Australia has recently seen powerful and painful examples of both reasons.
The first example was documented in the Royal Commission into Misconduct in the Banking, Superannuation_and Financial Services Industry
Banks created perverse incentive schemes that employees used to enrich themselves at the expense of customers.

The second was documented in the Royal Commission into Institutional Responses to Child Sexual Abuse. Churches (of many different denominations) covered up abuse for decades in order to protect the "reputation" of the institution.

Most institutions are started by people who have a vision of contributing to the  ``common good, '' whether it is providing a needed service, protecting the innocent, or providing a worthwhile product. However, the problems often begin in later generations when members of the institution are not so passionate or committed to that vision, and have more self-centred goals. Unfortunately, this is transition reflects some common features in the growth and evolution of large organisations.