Institutions and Economic Development on the Example of OECD Countries

Authors

  • Mateusz Borkowski University of Bialystok, Doctoral School in the Social Sciences, Poland

DOI:

https://doi.org/10.15290/eejtr.2020.04.02.02

Keywords:

institutional environment, formal institutions, informal institutions, economic development, soft modelling, PLS

Abstract

The problem of economic development has been the subject of discussion in economic theory for hundreds of years. It is one of the most important issues in economics. To this day, it is crucial to specify the factors and conditions of this phenomenon. The purpose of this article is to identify the direction and strength of the relationship between the quality of the institutional environment and the level of economic development. The soft modelling method and analysis of the literature were applied to identify this relationship. Selected research methods allowed for the positive verification of the adopted hypothesis- institutional environment has a significant, positive impact on shaping economic development dynamics.

Author Biography

Mateusz Borkowski, University of Bialystok, Doctoral School in the Social Sciences, Poland

MA, PhD Student, Doctoral School in the Social Sciences, University of Bialystok (Poland)

References

Barro, R.J. (1996). Democracy and growth. J Econ Growth, 1, 1-27. https://doi.org/10.1007/BF00163340.

Becker, G. (1962). Investment in Human Capital: A Theoretical Analysis. Journal of Political Economy, 70(5), 9-49. Retrieved from http://www.jstor.org/stable/1829103.

Bidard, C. (2014). The Ricardian rent theory: an overview. Centro Sraffa Working Papers, 8, 1-37. Retrieved from http://www.centrosraffa.org/public/54f0dec7-cea7-4c15-8121-d4a8ed3c7ccb.pdf.

Bochenek, M. (2016a). Historia rozwoju ekonomii. Od starożytności do szkoły klasycznej [The history of the development of economics. From antiquity to the classical school] (Vol. 1). Toruń: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika.

Bochenek, M. (2016b). Historia rozwoju ekonomii. Od idei socjalistycznych do historyzmu [The history of the development of economics. From socialist ideas to historicism] (Vol. 2). Toruń: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika.

Bochenek, M. (2016c). Historia rozwoju ekonomii. Od keynesizmu do syntezy neoklasycznej [The history of the development of economics. From Keynesianism to the neoclassical synthesis] (Vol. 5). Toruń: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika.

Borkowski, M. (2020). Economic security of Polish Voivodeships. Measuring the concept. Studia Prawno-Ekonomiczne, 114, 195-216. http://dx.doi.org/10.26485/SPE/2020/114/11.

Breton, T.R. (2014). A Human Capital Theory of Growth: New Evidence for an Old Idea. Center for Research in Economics and Finance (CIEF), Working Papers, 13-14. https://dx.doi.org/10.2139/ssrn.2456903.

Danowska-Prokop, B. (2017). Poglądy Adama Smitha, Tomasza Roberta Malthusa i Davida Ricardo na kwestie ludnościowe [The Views of Adam Smith, Thomas Robert Malthus and David Ricardo on Population Issues]. Studia Ekonomiczne. Zeszyty Naukowe Uniwersytetu Ekonomicznego w Katowicach, 309, 49-56. Retrieved from https://www.sbc.org.pl/dlibra/publication/287342/edition/271802/content?&ref=desc.

Dobler, C. (2011). The Impact of Formal and Informal Institutions on Economic Growth. Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien: Peter Lang International Academic Publishers. http://dx.doi.org/10.3726/978-3-653-00883-8.

Domar, E.D. (1946). Capital Expansion, Rate of Growth, and Employment. Econometrica, 14(2), 137-147. https://doi.org/10.2307/1905364.

European Commission (2010). Europe 2020. A strategy for smart, sustainable and inclusive growth, (2010), Brussels. Retrieved December 12, 2020, from https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A52010DC2020.

Faundez, J. (2016). Douglas North’s Theory of Institutions: Lessons for Law and Development. Hague Journal Rule Law, 8, 373-419. https://doi.org/10.1007/s40803-016-0028-8.

Fiedor, B. (2015). Instytucje formalne i nieformalne w kształtowaniu trwałego rozwoju [Formal and Informal Institutions in Shaping Sustainable Development]. Studia i Prace Wydziału Nauk Ekonomicznych i Zarządzania, 40(2), 83-107. http://dx.doi.org/10.18276/sip.2015.40/2-07.

Fraser Institute (2018). Human Freedom. Retrieved December 19, 2018, from https://www.fraserinstitute.org/studies/human-freedom-index-2018.

Fraser Institute (n.d.). Economic Freedom. Retrieved December 19, 2018, from https://www.fraserinstitute.org/economic-freedom/approach.

Freedom House (n.d.). Freedom House Index. Retrieved April 14, 2021, from https://freedomhouse.org/reports/freedom-world/freedom-world-research-methodology.

Gruszewska, E. (2013). Instytucje a proces tworzenia kapitału w Polsce [Institutions vs. The Process of Capital Formation in Poland]. Białystok: Wydawnictwo Uniwersytetu w Białymstoku.

Gruszewska, E. (2015). Instytucje a akumulacja kapitału rzeczowego we współczesnej gospodarce [The Influence of Institutions on Capital Accumulation in Contemporary Economy]. Nierówności Społeczne a Wzrost Gospodarczy, 42(2), 251-265. Retrieved from http://yadda.icm.edu.pl/yadda/element/bwmeta1.element.desklight-8cab7627-001f-4910-93cd-0adba046894b/c/17_Gruszewska_E..pdf.

Gruszewska, E. (2017). Instytucje formalne i nieformalne. Skutki antynomii [Formal and Informal Institutions. Results of Antinomy]. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 493, 36-50. http://dx.doi.org/10.15611/pn.2017.493.03.

Haller, A.P. (2012). Concepts of Economic Growth and Development. Challenges of Crisis and of Knowledge. Economy Transdisciplinarity Cognition, 15(1), pp. 66-71. Retrieved from https://www.ugb.ro/etc/etc2012no1/09fa.pdf.

Harrod, R.F. (1939). An Essay in Dynamic Theory. The Economic Journal, 49(193), 14-33. https://doi.org/10.2307/2225181.

Heritage Foundation (n.d.). Economic Freedom Index. Retrieved December 19, 2018, from https://www.heritage.org/index.

Hodgson, G.M. (2006). What Are Institutions? Journal of Economic Issues, 40(1), 1-25. https://doi.org/10.1080/00213624.2006.11506879.

Keynes, J.M. (2003). Ogólna teoria zatrudnienia, procentu i pieniądza [The General Theory of Employment, Interest and Money]. Warszawa: Wydawnictwo Naukowe PWN. (Orginal work published 1936).

Lewis, W.A. (1954). Economic Development with Unlimited Supplies of Labour. The Manchester School, 22(2), 139-140. https://doi.org/10.1111/j.1467-9957.1954.tb00021.x.

Lohmöller, J.B. (1989). Latent Variable Path Modeling with Partial Least Squares. Berlin, Heidelberg: Springer-Verlag. https://doi.org/10.1007/978-3-642-52512-4.

Malthus, T.R. (2003). Prawo ludności. Wydał, objaśnił i poprzedził przedmową A. Krzyżanowski [An Essay on the Principle of Population] (K. Stein, Trans.). Warszawa, Kraków, Lublin, Łódź, Poznań, Wilno, Zakopane: Wydawnictwo Gebethnera i Wolfa. (Original work published 1798).

Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107(2), 407–437. https://doi.org/10.2307/2118477.

Marcinkiewicz, J. (2013). Procesy globalizacji a poziom rozwoju Giełdy Papierów Wartościowych w Warszawie - model miękki [The processes of globalization and the level of development of the Warsaw Stock Exchange - soft model]. Zarządzanie i Finanse, 11(1), 445-460. Retrieved from http://zif.wzr.pl/pim/2013_1_1_30.pdf.

Marx, K., & Engels, F. (1955). Manifesto of the Communist Party. New York: Appleton-Century-Crofts, Inc. (Orginal work published 1848).

Meoqui, J.M. (2014). Reconciling Ricardo’s Comparative Advantage with Smith’s Productivity Theory. Economic Thought, 3(2), 1-33. Retrieved from https://mpra.ub.uni-muenchen.de/id/eprint/41442.

Miłaszewicz, D. (2011). Jakość instytucji a wzrost gospodarczy [The Quality of Institutions and Economic Growth]. Studia i Prace Wydziału Nauk Ekonomicznych i Zarządzania, 19, 5-24. Retrieved from http://wneiz.pl/nauka_wneiz/sip/sip19-2011/SiP-19-1.pdf.

Misiewicz, E. (2013). Działalność innowacyjna a rozwój gospodarczy województw Polski [Innovation activity and Economic Development of Polish Voivodeships]. Zarządzanie i Finanse, 3(2), 195-206. Retrieved from http://zif.wzr.pl/pim/2013_3_2_14.pdf.

North, D.C., (1990). Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press. https://doi.org/10.1017/CBO9780511808678.

Osiobe, E.U. (2019). A Literature Review of Human Capital and Economic Growth. Business and Economic Research, 9(4), 179-196. https://doi.org/10.5296/ber.v9i4.15624.

Palmer, G. (1992). The Earth Summit: What went wrong at Rio?. Washington University Law Quarterly, 70(4), 1005-1028. Retrieved from https://openscholarship.wustl.edu/law_lawreview/vol70/iss4/1.

Pearce, D., Barvier, E. & Markandya, A., (1990). Sustainable Development. Economics and Environment in the Third World. Cheltenham: Edward Elgar Publishing.

Perło D. (2014b). Environmental quality as a decisive variable in shaping regional development policy. Studies in Logic, Grammar and Rhetoric, 37(1), 159-178. https://doi.org/10.2478/slgr-2014-0023.

Perło, D. (2014a). Modelowanie zrównoważonego rozwoju regionów. Białystok: Wydawnictwo Uniwersyteckie Trans Humana.

Piętak, Ł. (2016). Zrównoważony wzrost gospodarczy w teoriach i modelach wzrostu i rozwoju gospodarczego [Sustainable Economic Growth in Theories and Models of Economic Growth and Development]. Gospodarka w praktyce i teorii, 2(43), pp. 51-77. http://dx.doi.org/10.18778/1429-3730.43.04.

Poczta-Wajda, A., & Sapa, A. (2017). Paradygmat rozwoju zrównoważonego - ujęcie krytyczne [The paradigm of sustainable development: a critical approach]. Progress in Economic Sciences, 4, 131-142. http://dx.doi.org/10.14595/PES/04/009.

Popiel, I. (2015). Aspekty pojęciowe kapitału ludzkiego i jego znaczenie [Conceptual Aspects of Human Capital and Its Importance]. Studia Prawno-Ekonomiczne, 95, 301-315.

Ratajczak, M. (2011). Popularność ekonomii instytucjonalnej. Moda czy trwała zmiana? [The Popularity of Institutional Economics. A Fashionable Trend or Lasting Change?]. Zeszyty Naukowe/ Polskie Towarzystwo Ekonomiczne, 9, 29-42. Retrieved from http://www.pte.pl/pliki/1/1144/ZN-9_Ratajczak.pdf.

Ricardo, D. (2001). On The Principles of Political Economy and Taxation. Ontario: Batoche Books. (Orginal work published 1817). Retrieved from https://socialsciences.mcmaster.ca/econ/ugcm/3ll3/ricardo/Principles.pdf.

Rocki, M. (1998). Miękkie wskaźniki stanu gospodarki [Soft Indicators of Economic Situation]. Prace i Materiały Instytutu Rozwoju Gospodarczego SGH, 60, 107-127. Retrieved from http://cejsh.icm.edu.pl/cejsh/element/bwmeta1.element.cejsh-8838c708-5163-49f3-b574-fa8852ebcb07/c/PiM_60_M.Rocki.pdf.

Rodrik, D. (2006). Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform. Journal of Economic Literature, 44(4), 973-987. Retrieved from https://www.jstor.org/stable/30032391.

Rodrik, D. (2007). One Economics. Many Recipes. Globalization, Institutions, and Economic Growth. Princeton: Princeton University Press. https://doi.org/10.2307/j.ctvcm4jbh.

Rodrik, D., Subramanian A., & Trebbi, F. (2004). Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development. Journal of Economic Growth, 9, 131-165. https://doi.org/10.1023/B:JOEG.0000031425.72248.85.

Rogowski, J. (1990). Modele miękkie. Teoria i zastosowanie w badaniach ekonomicznych. Białystok: Wydawnictwo Filii Uniwersytetu Warszawskiego w Białymstoku.

Rostow, W.W. (1960). The Stages of Economic Growth. A Non-Communist Manifesto. Cambridge: Cambridge University Press.

Roszkowska, E., & Filipowicz-Chomko, M. (2016). Ocena rozwoju społecznego województw w latach 2005 oraz 2013 w kontekście realizacji koncepcji zrównoważonego rozwoju z wykorzystaniem metody TOPSIS [The Analysis of Social Development of Polish Voivodeships in 2005 and 2013 in the Context of Implementing the Concept of Sustainable Development Using TOPSIS Method]. Ekonomia i Środowisko, 57(2), 94-118. Retrieved from http://www.ekonomiaisrodowisko.pl/uploads/ekonomiaisrodowisko57/09_roszkowska_filipowicz.pdf.

Schultz, T.W. (1961). Investment in Human Capital. The American Economic Review, 51(1), 1-17. Retrieved from https://www.jstor.org/stable/1818907.

Schumpeter, J.A. (1949). The Theory of Economic Development. An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Massachusetts: Harvard University Press. (Original work published 1912).

Skrodzka, I., & Ciborowski, R. (2019). International Technology Transfer, Innovation and Economic Development of European Union Countries in 2008-2017. European Research Studies Journal, 22(3), 384-404. https://portal.issn.org/resource/ISSN/1108-2976.

Smith, A. (2007). An Inquiry into the Nature and Causes of the Wealth of Nations. Amsterdam, Lausanne, Melbourne, Milan, New York, Sao Paulo: MetaLibri. (Original work published 1776). Retrieved from https://www.ibiblio.org/ml/libri/s/SmithA_WealthNations_p.pdf.

Solow, R.M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65-94. https://doi.org/10.2307/1884513.

Swan, T.W. (1956). Economic Growth and Capital Accumulation. Economic Record, 32(2), 334-361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x.

Weingast, B.R. (2018). The Many, Diverse 'Main Points' of Adam Smith's the Wealth of Nations. Political Theory: History of Political Thought eJournal, 1-27. https://dx.doi.org/10.2139/ssrn.3163699.

Wilkin, J. (2016). Instytucjonalne i kulturowe postawy gospodarowania. Humanistyczna perspektywa ekonomii. Warszawa: Wydawnictwo Naukowe SCHOLAR.

Wold, H. (1980). Soft Modelling: Intermediate between traditional model building and data analysis. Mathematical Statistics Banach Center Publications, 6(1), 333-346. Retrieved from http://eudml.org/doc/209137.

World Bank (n.d.). Doing Business. Retrieved December 19, 2018, from http://www.doingbusiness.org/.

World Bank (n.d.). The Worldwide Governance Indicators (WGI). Retrieved December 19, 2018, from http://info.worldbank.org/governance/wgi/index.aspx#home.

Zagóra-Jonszta, U. (2015). Teoria rozwoju gospodarczego i „twórczej destrukcji” Schumpetera oraz jej aktualność [Validity of Economic Development Theory and Schumpeter's Creative Destruction in Modern Times]. Optimum. Studia Ekonomiczne, 3(75), 20-31. http://dx.doi.org/10.15290/ose.2015.03.75.02.

Downloads

Published

2021-02-01

How to Cite

Borkowski, M. (2021). Institutions and Economic Development on the Example of OECD Countries. Eastern European Journal of Transnational Relations, 4(2), 27–48. https://doi.org/10.15290/eejtr.2020.04.02.02