Interaction Of Formal And Informal Institutions - Impact On Economic Success Cover Image

Interakcija formalnih i neformalnih institucija - implikacije na ekonomsku uspešnost
Interaction Of Formal And Informal Institutions - Impact On Economic Success

Author(s): Vlastimir Leković
Subject(s): Economy
Published by: Универзитет у Нишу
Keywords: formal institutions; informal institutions; economic system and economic actors; complementarity; efficiency; effectiveness

Summary/Abstract: This research paper explores the general framework of the institutional structure of a national economy which is made up of formal institutions, informal institutions and their compliance and implementation mechanisms. The interdependence between the formal and informal institutions is especially examined, along with the effects of their mutual interactions on the business environment. These in turn provide the opportunities for the achievement of the adequate level of economic success of both business and non-business entities, as well as the entire economy. The aim of this paper is to point to the necessity of implementing institutional changes that will result in providing favorable business environment for the business entities and increase of their economic prosperity levels, in accordance with the analysis of the influence of the informal institutions on the formal ones and their interactive relationship. Based on the exploration of the interaction between the formal and informal institutions in different economic systems, the conclusion of this paper is that the best results are achieved in the conditions of their maximum synchronization and complementarity.

  • Issue Year: 2011
  • Issue No: 4
  • Page Range: 357-370
  • Page Count: 14
  • Language: English