IDEAS home Printed from https://ideas.repec.org/a/blg/journl/v19y2024i2p238-249.html

The Influence Of Demonstrative Formal Rules On The Dynamics Of The Effectiveness Of Institutional Frameworks

Author

Listed:
  • Vitaliy SERZHANOV

    (Uzhhorod National University, Ukraine)

  • Fedir ABRAMOV

    (National Technical University "Kharkiv Polytechnic Institute", Ukraine)

  • Volodymyr ANDRYSHYN

    (Uzhhorod National University, Ukraine)

Abstract

The purpose of this article is to identify the impact of demonstrative formal rules on the dynamics of the effectiveness of institutional frameworks. The importance of forming an effective institutional framework for any country is undeniable. The presence of an effective institutional framework is a prerequisite for ensuring the successful socio-economic development of the country, on the other hand, an ineffective institutional framework can have a wide range of negative consequences, including disparities in regional development. However, the achievement of today's effectiveness of institutional frameworks cannot guarantee the proper socio-economic development of the country in the long term, because the institutional framework of any country is not unchanged, but is in a state of constant transformation due to the need to adapt the current formal rules to the new challenges facing society. Accordingly, the identification of the factors that determine the dynamics of the effectiveness of formal rules is no less important than the identification of the factors of ineffectiveness of formal rules. It is shown that one of these factors is demonstrative formal rules, that is, rules whose target effectiveness was not taken into account from the very beginning, and the only purpose of their implementation was to increase the political ratings of the initiators of their implementation. It has been proven that an effective measure to prevent the spread of demonstrative formal rules can be an increase in the general education of the population. The main advantages of the proposed measure are the low level of transaction costs and the absence of danger of manipulating public sentiment.

Suggested Citation

  • Vitaliy SERZHANOV & Fedir ABRAMOV & Volodymyr ANDRYSHYN, 2024. "The Influence Of Demonstrative Formal Rules On The Dynamics Of The Effectiveness Of Institutional Frameworks," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(2), pages 238-249, August.
    • Handle: RePEc:blg:journl:v:19:y:2024:i:2:p:238-249
    as

    Download full text from publisher

    File URL: http://magazines.ulbsibiu.ro/eccsf/RePEc/blg/journl/19215serzhanov.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Desiree A. Desierto & John V. C. Nye, 2011. "When do Formal Rules and Informal Norms Converge?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 613-629, December.
    2. Paul R. Milgrom & Douglass C. North & Barry R. Weingast*, 1990. "The Role Of Institutions In The Revival Of Trade: The Law Merchant, Private Judges, And The Champagne Fairs," Economics and Politics, Wiley Blackwell, vol. 2(1), pages 1-23, March.
    3. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    4. Turan Yay & Gülsün G. Yay & Tolga Aksoy, 2018. "Impact of institutions on entrepreneurship: a panel data analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 131-160, April.
    5. Simon Hartmann & Rok Spruk, 2021. "Long-term effects of institutional instability," Empirical Economics, Springer, vol. 61(4), pages 2073-2112, October.
    6. John Wallis, 2015. "Rules, Organizations, and Governments," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 69-86, March.
    7. Siong Law & W. Azman-Saini, 2012. "Institutional quality, governance, and financial development," Economics of Governance, Springer, vol. 13(3), pages 217-236, September.
    8. Natsuka Tokumaru, 2020. "Coevolution of institutions and residents toward sustainable glocal development: a case study on the Kuni Umi solar power project on Awaji Island," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 197-217, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leeson, Peter T., 2005. "Endogenizing fractionalization," Journal of Institutional Economics, Cambridge University Press, vol. 1(1), pages 75-98, June.
    2. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    3. Pyle, William, 2006. "Resolutions, recoveries and relationships: The evolution of payment disputes in Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 317-337, June.
    4. Mika Kallioinen, 2017. "Inter‐communal institutions in medieval trade," Economic History Review, Economic History Society, vol. 70(4), pages 1131-1152, November.
    5. Sanchez-Pages Santiago & Straub Stéphane, 2010. "The Emergence of Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, September.
    6. Haucap, Justus, 2017. "The rule of law and the emergence of market exchange: A new institutional economic perspective," DICE Discussion Papers 276, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    7. Luciana Cecilia Moscoso Boedo, 2009. "Labels for Misbehavior in a Population with Short-Run Players," Working Papers DTE 468, CIDE, División de Economía.
    8. Armelle Mazé & Claude Ménard, 2010. "Private ordering, collective action, and the self-enforcing range of contracts," European Journal of Law and Economics, Springer, vol. 29(1), pages 131-153, February.
    9. Chrysanthos Dellarocas, 2003. "The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms," Management Science, INFORMS, vol. 49(10), pages 1407-1424, October.
    10. Beckmann, Volker & Boger, Silke, 2004. "Courts and contract enforcement in transition agriculture: theory and evidence from Poland," Agricultural Economics, Blackwell, vol. 31(2-3), pages 251-263, December.
    11. Kenju Kamei & Smriti Sharma & Matthew J. Walker, 2023. "Sanction Enforcement among Third Parties:New Experimental Evidence from Two Societies," Keio-IES Discussion Paper Series 2023-010, Institute for Economics Studies, Keio University.
    12. Woodruff, Christopher, 1998. "Contract enforcement and trade liberalization in Mexico's footwear industry," World Development, Elsevier, vol. 26(6), pages 979-991, June.
    13. repec:jpe:journl:1707 is not listed on IDEAS
    14. Peter T. Leeson, 2008. "How Important is State Enforcement for Trade?," American Law and Economics Review, American Law and Economics Association, vol. 10(1), pages 61-89.
    15. Monte, Daniel & Pinheiro, Roberto, 2025. "Costly information intermediation: Quality vs. Spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 239(C).
    16. Roth, M. Garrett & Skarbek, David, 2014. "Prison Gangs and the Community Responsibility System," Review of Behavioral Economics, now publishers, vol. 1(3), pages 223-243, May.
    17. Skarbek, David, 2016. "Covenants without the Sword? Comparing Prison Self-Governance Globally," American Political Science Review, Cambridge University Press, vol. 110(4), pages 845-862, November.
    18. Przepiorka, Wojtek, 2014. "Reputation in offline and online markets: Solutions to trust problems in social and economic exchange," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 16(1), pages 4-10.
    19. Balmaceda, Felipe & Escobar, Juan F., 2017. "Trust in cohesive communities," Journal of Economic Theory, Elsevier, vol. 170(C), pages 289-318.
    20. Kaire Põder, 2010. "Credible commitment and cartel: the case of the Hansa merchant in the guild of late medieval Tallin," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 10(1), pages 43-60, June.
    21. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Agricultural Transition - Theory And Evidence From Poland," 2003 Annual meeting, July 27-30, Montreal, Canada 22213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:blg:journl:v:19:y:2024:i:2:p:238-249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mihaela Herciu (email available below). General contact details of provider: https://edirc.repec.org/data/feulbro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.