inostrani kapital kao faktor razvoja zemalja - Ekonomski fakultet u ...

Abstract: The institutions can be defined in many different ways. In fact they
represent formal and informal rules for managing the relationship between humans. In
contemporary circumstances, the institutions i.e. the changes that are going on within their
frameworks are considered as being very significant carriers of the socio-economic
development. Taking this into consideration, it is consequent that the transitional
circumstances impose a need for giving appropriate attention to the changes that are going
on in this field in order to enhance the economic growth. For example, the efficient system
of property rights and the efficient implementation of the contracts enable decrease in
transaction costs in case when economic agents undertake certain actions and thus
increase the economic efficiency. Unless someone guarantees the right for resource
ownership, their usage and transfer, the producers will face the risk of losing their
resources. This risk appears to be especially important for the countries in transition,
because the unsafe property rights represent an inevitable feature of the systems in this type
of countries.
The implementation of these findings in the example of the Republic of Macedonia
shows that reforming the actual institutions and establishing new and efficient institutions
is something that will significantly influence the decrease in transaction costs and lead to
successful implementation of contracts, clear determination of property rights, decrease in
the amount of asymmetric information, and all these will consequently add to the process of
improving the business climate, attracting foreign capital and thus produce higher and
more stable development rates of the Macedonian economy.
This paper leads to conclusions which point to the fact that a well–framed and
successfully realized reform of the actual institutions in Macedonia in conjunction with the
improvement of property and contract rights will not only help the economy, but this will
also mean that resources will be held by individuals and firms who have safe and precisely
defined interest in protecting them, and thus decrease the level of corruption and crime. All
this will represent a significant stimulus for attracting foreign capital.
Key words: institutions, institutional changes, economic development, foreign
capital, foreign direct investments.
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1. Introduction - Institutionalism as a Theoretical Framework
Institutionalism as economic school appeared in the USA, at the end of the
XIX and the beginning of the XX century. It holds institutions as a basis of its
teaching process. Meanwhile, this notion also comprises different social
phenomena such as the legal norms, private property, customs, traditions, norms,
law and competition. From general perspective, this notion has been presented too
widely and it comprises a large number of social categories. However, this school
explains that the institutions i.e. the changes that are going on within their
frameworks are carriers of the social-economic development. Because of that, the
goal of economics as science is to describe the evolution of the institutions, the
institutional changes and their role in the society beginning from the past up to
present time, and to point out the directions of their further transformation, as well
as to explain the influence they have on the social-economic development. The