The role of institutions in economic performance

Abstract

institutions, as well as to develop a conceptual model that illustrates the interaction between institutions and socioe conomic development. The object of this particular study is economic, political and value institutions. The methods of the study are: logical and comparative analysis of the literature, synthesis and deduction. Institutions and economic developmentInstitutional economics stresses the crucial role of insti tutions in economic performance. It has been argued that such factors as innovation, economies of scale, education, or capital accumulation are not the causes of growth, but represent the growth itself, and that political and economic institutions are the fundamental cause of differences in economic development.At the end of the 20th century, economic thought has re turned to the analysis of the institutional environment. This shift has been influenced by the collapse of communism, the transition from socialism to capitalism in postsoviet Abstract. The purpose of the article is to survey the significant literature on the role of institutions -formal and informal constraints that affect investment in physical and human capital -in economic performance and propose a new, comprehensive definition and classification of institutions, as well as to develop a conceptual model to illustrate the interaction between institutions and socioeco nomic development. The literature shows that institutions played an important role in facilitating technological progress and leading the world into the modern economic regime. Moreover, quantitative research proves that institutions significantly impact socioeconomic performance around the globe.

Institutional complementarity for social and economic development

“…The institutional quality impact on the economic growth, as a rule, is defined via peculiarities of the social and economic models of different countries, particularly, changes in the transition economies (Melnyk et al 2018), Redek and Susjan (2005). Chousa et al (2005), Vitola and Senfelde (2015) evaluated the institutional system's development in transition economies and the impact it has on economic performance. Using operational indicator of institutional system dynamics they proved dependence between institutional changes and economic growth in transition economies.…”

Effect of Institutional Quality and Wealth from Oil Revenue on Economic Growth in Oil-Exporting Developing Countries

“…Second, a two-step system generalized method of moments (GMM), suggested by Blundell and Bond [44], was employed to estimate the data used for the first panel ARDL regression. This method is also appropriate for this study, considering its ability to deal with the problem of endogeneity, which has been found to largely characterize institution variables [45][46][47][48][49]. To enable estimation by means of dynamic panel GMM, a dynamic panel model is formulated from Equation 1as follows:…”

“…The result of the GMM estimation is presented in Table 6. To verify the consistency of our GMM estimator, two specification tests were conducted, namely the Sargan test for over-identifying restriction and the Arellano-Bond (AR(2)) test for autocorrelation in the disturbances [48]. While the former tests the overall validity of the instruments employed, the latter tests the null hypothesis that the model does not suffer from second-order serial correlation.…”

An Empirical Investigation of the Institutions’ Hypotheses in Nigeria

“…Hence, the players are expected to play according to the rules of the game and the existing institutions should provide the right enticements or rewards for the good players and disciplinary measures for the bad players. In the same vein, Vitola and Senfelde (2015) opine that institutions are both formal and informal constraints that affect investment in both physical and human capital. The existence of strong institutions helps in building both investors" confidence and consumers" confidence.…”