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Institutions and performance

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  • Petr Vymětal
  • Milan Žák
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    Abstract

    The article is based on the thesis that institutional quality influences the economic performance. From this point of view under certain circumstance the government policy is able to increase efficiency and performance of economies through creation, maintenance and cultivation of appropriate political and economic institutions ("political and economic design"). This way is not about state engineering indeed, but about possibility to accept and/or cancel measures which in principle influence both current production capability of economies and its long-term potential too. Authors do not refuse to analyse an influence of informal institutions, which undoubtedly create "the spawn, out of all grown up". If the state were to be understood in its minimal role, i. e. as the guarantee and co-creator of basic "well-established" rules and/or institutions, the rational economic policy could be able to influence the process both to reduce transaction costs and to rise economic efficiency.

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    Bibliographic Info

    Article provided by University of Economics, Prague in its journal Politická ekonomie.

    Volume (Year): 2005 (2005)
    Issue (Month): 4 ()
    Pages: 545-566

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    Handle: RePEc:prg:jnlpol:v:2005:y:2005:i:4:id:522:p:545-566

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    Related research

    Keywords: institutions; new institutional economics; rules; D. C. North; economic performance; institutional quality;

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