Specifics of the Economic Institutions in the Social Area

Every economic system can be considered a formal social-economic structure. It changes, and under certain institutional conditions it can develop stable. In its logical unity the economic system includes the “real” sector of the economy and social area. The statement that in Bulgaria the economic and institutional transformation in the real sector is done faster in transition is well-known. This paper studies the specifics of the economic institutions in the social area. The theoretical base of the analysis is the neoclassical and institutional approach. The branches of the social area “produce” services, which are direct investments in the human capital. The role of the human capital in the times of the knowledge economy is increasing. The institutions are the sustainable norms and rules, which determine the behavior of the people, of the economic subjects. The institutions are the very organizations – firms, departments, state. The main thoughts in the paper are on whether the forming of human capital can be left in the power of the institutions on the competitive market. This would mean realization of the functions of the market, forming a balanced market price of the social goods, monopolization, etc. The dilemma concerns the issue how admissible this market is in this socially sensitive area. It is known that the market is “socially immune”. The article shows the main barriers to the full application of the market institutions in the social area. “Quasi” market forms of production and distribution of the main services are applicable here. The article defends another thesis as well – that there are factors requiring the application of elements of the market mechanism and the economic principles of behavior in the branches of the social area. “Building in” of the economic institutions in the branches of the social area should guarantee an optimal ratio between humanism and economization. The outsourcing and public-private partnership are some of the effective forms of management in the social areas.