Evaluation of Institutional Quality of Selected Eu Transition Economies and Former Soviet Republics Using Dea Approach

Quality of institutions belongs among the key factors, which affects the development of economy, because it cultivates social responsibility, business environment and frames conditions for business. At present it is still more respected that it is the institutional quality, which significantly determines economic development. Countries that have good institutional framework and their economic systems were connected with institutional quality in long-term, reach higher levels of economic performance today. The goal of the paper is to assess the impact of institutional quality on economic aspects of transition economies. The institutional quality is assessed by using the indicators of the World Economic Forum and Worldwide Governance. Relationship of the institutional quality economic performance is studied in this paper using non-parametric methods of DEA, which allowed to assess the extent to which the institutional quality reflected in the level of economic performance of evaluated countries and identify the potential for improvement in the quality of governance to enhance their economic level. The results show a relatively inefficient use of governance, especially in the transition economies of post-Soviet countries.