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

esponsible for maintaining the macroeconomic stability i.e. the high level
of price stability, they are responsible for eliminating the cyclical
movements and the system’s ability to handle economic crisis. This group
of institutions comprises the Central bank, the foreign exchange regime,
the budget and the fiscal rules. .
• Institutions responsible for market legitimacy – these institutions are
responsible for social care and social insurance; they are responsible for
effectuating the income allocation and for relativization of the social
conflicts. For instance, to this list belong: the pension system, the schemes
for providing help in case of unemployment, and other social funds.
Another essential aspect when explaining the term institutions is the
possibility to empirically measure their quality. Namely, in the literature there are
three criteria according to which is measured the quality of the institutions existing
in one system:
• Quality of governance (degree of corruption, political rights, public sector
efficiency and quality of government regulation);
• Degree of legal protection of private property;
• Limits and restriction of the public elites.
Subjectivism is pointed out as a major drawback of the above mentioned
indicators because they are most often based on reports and perceptions deriving
from domestic and foreign experts, representatives of international organizations or
non-government organizations. Also, a restricting factor is the fact that in
themselves they include phenomena and processes that are in their nature difficult
to measure. However, no matter the presented restrictions, these indicators are
valid and relevant for drawing conclusions about the quality of the institutions.
2.2. Economic and Political Institutions vs. Organizations
In order to provide a better explanations regarding the institutions that are in
the focus of the New Institutional Economics analysis, at first it should be made
distinction between institutions and organizations. Generally speaking, institutions
are defined as rules of play i.e. restrictions created by people which are consisting
part of the human interaction. These restrictions can have formal character
(constitution, statute, common law and regulations) and informal character
(conventions, norms of behavior and individual rules of behavior).
Formal restrictions can be political or judicial, economic restrictions or
contracts. Political restrictions determine the hierarchical structure of the society,
the basic structure of decision making and the explicit objects of control. Economic
restrictions define the property rights. Contracts consist of provisions that are
specific for certain agreement or trade.
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