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Institutional Changes as a Driving Force for Structural Reforms in the Transforming Economies

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Abstract

The article discusses two basic approaches for the structural reform in the countries in transition – evolutionary and innovational. This is done from the viewpoint of the New Institutional Economy (NIE). According to the first approach the institutional changes are described as a result of the process of self-organisation (self-reproduction, self-identification, self-perpetuation) in which only economic factors take part. The aim is to minimise the transaction expenses, i.e. the expenses for the realisation of the deals (the contracts) which leads to the increase of the profits of those who initiated the change. This however is not always accomplished in the desired direction because a historical burden and dependence are present. In many cases society is locked into ineffective institutions and overcoming such situations may be performed only with the active intervention of the state. The innovation approach supposes the involvement of politicians in institutional changes, which inevitably leads to the satisfaction of the interests of separate individuals and groups of persons at the expense of those who were privileged by the previous institutions.

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  • Krassimira Kuneva, 2001. "Institutional Changes as a Driving Force for Structural Reforms in the Transforming Economies," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 77-89.
  • Handle: RePEc:bas:econth:y:2001:i:2:p:77-89
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    References listed on IDEAS

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    1. S. R. Johnson, 1993. "Emerging Agricultural Institutions in the New Independent States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 828-834.
    2. Johnson, Stanley R., 1993. "Emerging Agricultural Institutions in the New Independent States," Staff General Research Papers Archive 568, Iowa State University, Department of Economics.
    3. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    4. Michael Hubbard, 1997. "The 'New Institutional Economics' In Agricultural Development: Insights And Challenges," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 239-249.
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    Cited by:

    1. E Kasabov, 2010. "Success of Path Dependence Through Perpetuation of Failure During Reform," Economic Issues Journal Articles, Economic Issues, vol. 15(1), pages 55-82, March.

    More about this item

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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