Managing the institutional environment and impact on the competitiveness of transitional economies

Abstract

The main unsolved issue in the qualitative research of the "new" institutional economics in the area of the institutional impact on economic growth is how productive institutions occur, i.e., which variables explicitly "stand" behind the institutional "infrastructure" impact on economic growth. The research presents the postulates of the "new" institutional economics, claiming a connection between the institutional structure and the movement of economic growth. Furthermore, the impact of institutional quality on economic growth was analyzed on examples of individual national economies. The comparative method of the assessment based on six criteria: voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law and control of corruption, and the comparison of the GDP per capita of the same as one of the most significant economic indicators, tested the primary hypothesis (H1) in this work: institutions are the fundamental determinant of the long-term success in economy, and the importance of government effectiveness is seen through economic growth, especially long-term growth. The conducted research showed a high level of correlation between institutions' success and the gross domestic product with indications of equal returns per ratio and the fact that the advancement of institutional quality, indirectly through GDP, can lead to the growth of the relative significance of economies.