The paper is focused on conceptual and methodological issues relevant to the evaluation of the roles played by formal public and private institutions in reducing the vulnerability of rural communities. It discusses the need to study and understand institutional adaptations and clarifies the definition and operationalisation of institutions. It provides a working definition of institutional adaptive capacity and discusses the main components for a successful evaluation required for creating a successful structured institutional adaptive capacity, relating these components to three elements: inputs, processing, and outputs that are described to be later assessed during the evaluation of the adaptive capacities of public institutions. The paper contains an appendix that provides a detailed description of the main institutions in the area of water management in Chile and Canada.