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Impact Of Informal Institutions On Economic Growth And Development

Author

Listed:
  • Katarina Marosevic

    (Faculty of Law in Osijek, Republic of Croatia)

  • Zvonimir Jurkovic

    (Doctoral candidate, Postgraduate Ph.D. study “Management”, Republic of Croatia)

Abstract

Achieving the long-term economic growth rate and development is the aspiration of all economic policy makers. Contemporary economic theory recognizes institutions as fundamental sources of economic prosperity. According to Douglas North (1991), institutions represent designed limitations that manage political, economic and social interactions. Precisely, institutions are the rules of behavior in a society, or more formally speaking, the restrictions on which man has fi gured out how to shape human interaction (North, 2003:13). Besides formal institutions, i.e. constitutions, laws, property rights, informal institutions encompass customs, traditions and codes of conduct. Although more attention in developed economies is devoted to formal institutions, many authors deal with informal institutions as objects of their research. The purpose of this paper is to present institutions through the function of economic growth and development. Besides, the purpose is also to consider the relationship between formal and informal institutions. Informal institutions are thoroughly presented through a series of examples which defi ne and analyze their impact on development outcomes.

Suggested Citation

  • Katarina Marosevic & Zvonimir Jurkovic, 2013. "Impact Of Informal Institutions On Economic Growth And Development," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 9, pages 701-716.
    • Handle: RePEc:osi:journl:v:9:y:2013:p:701-716
    as

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    References listed on IDEAS

    as
    1. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    2. Williamson, Claudia R., 2012. "Dignity and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 763-771.
    3. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    4. G. Hodgson, 2007. "What Are Institutions?," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 8.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    institutions; informal institutions; growth; development;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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