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When formal institutions fail in fostering economic growth: the case of post-communist countries

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  • Tamilina, Larysa
  • Tamilina, Natalya

Abstract

The article explains the peculiarities of institutional effects on growth rates in post-communist countries. By proposing a certain dependence of the institution-growth nexus on the nature of institutional emergence, the distinction between revolutionary and evolutionary processes of institution formation is introduced. Theoretical and empirical juxtapositions are used to demonstrate that transition countries’ institutions that are constructed revolutionarily differ from those that emerge evolutionarily in a twofold manner in their relationship to growth. Growth rates of their economies are less likely to depend on the quality of economic institutions and are more likely to be a function of the maturity of political institutions. In addition, economic institutions in post-communist countries prove to be a product of the quality of political bodies to a greater extent than their evolutionary alternatives.

Suggested Citation

  • Tamilina, Larysa & Tamilina, Natalya, 2012. "When formal institutions fail in fostering economic growth: the case of post-communist countries," MPRA Paper 48352, University Library of Munich, Germany, revised 01 Nov 2012.
    • Handle: RePEc:pra:mprapa:48352
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    More about this item

    Keywords

    economic growth; formal institutions; institutional formation; institutional change; post-communist countries;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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