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Rule Of Law And Economic Growth: Evidences From South East Europe

In: Shaping Post-COVID World – Challenges for Economic Theory and Policy

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  • Pece Nedanovski
  • Katerina Shapkova Kocevska

Abstract

The rule of law is a principle that promotes the limitation of arbitrary power. Although there is no universal definition in the literature, this notion encompasses several important topics, including personal security, property rights security, government checks, and corruption control, among others. There has recently been a rising body of research demonstrating the importance of the rule of law in maintaining economic development, fostering justice, and enhancing democratic capacities in nations around the world. Our paper focuses on understanding the importance of rule of law for economic prosperity in the countries that geographically belong to the region of South East Europe. In our analysis, we include the following countries: Albania, Bosnia and Hercegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Romania, Serbia and Slovenia. First, we investigate five different rule of law indicators present in the institutional economics literature. Next, we evaluate the influence of rule of law on economic prosperity in South East Europe from 1996 to 2020 in the second half of the article. Our hypothesis that stronger adherence to rule of law principles stimulates economic growth in this region is supported by the regression model results.

Suggested Citation

  • Pece Nedanovski & Katerina Shapkova Kocevska, 2023. "Rule Of Law And Economic Growth: Evidences From South East Europe," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 4, pages 67-85, Faculty of Economics and Business, University of Belgrade.
    • Handle: RePEc:beo:swcetp:2304
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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