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

On the other hand, there are informal restrictions also. Informal restrictions
are a constituent part of culture, and they are transferred from generation to
generation through the process of learning and imitation of knowledge, values and
behavior. These restrictions consist of conventions, norms of behavior and
individual rules of behavior. They do not react fast to changes going on in the
formal rules and because of this reason the same formal rules established in
different societies will not give the same results.
Unlike institutions, organizations are participants in the game that is set up by
the institutions. They represent a group of individuals that are connected via mutual
goal. Organizations can be political bodies (political parties, governments, senate
etc.), economic bodies (enterprises, family businesses, co-operations, trade unions
etc.) and social bodies (churches, clubs, athletic associations) and educational
bodies (schools, faculties, centers for informal education etc.). There is a feedback
relation between institutions and organizations. Namely, through the imposed rules
the institutions influence process of creation and development of certain
organizations. At the same time, through the intention for achieving determined
objectives organizations influence the development of the institutions.
In the literature that deals with the issue regarding institutions, their
development and the influence they have on the wider economic system, there is a
clear distinction between the notions economic institutions and political
institutions.
Economic institutions are represented by the ownership and contractual rules
and regulations that coordinate economic interactions. Through these institutions,
individuals and organizations coordinate their activities in production, trade and
distribution. All these transactions cause transaction costs which incur because
there are information problems. In order to lower these costs and to increase
economic efficiency and productivity with the subject included in the transaction,
state comes into action. The state is structured by political institutions that
influence the processes of creation and implementation of legal environment,
which on their part influence the creation, operation and changes of the institutions.
Having a better institutional framework means lowering the transaction costs and
consequently alleviating transactions between parties. This leads to more efficient
allocation of physical and human capital; it increases the specialization in the
production process, expands markets and trade, and encourages investments. Well
defined and applicable property rights, generally, have influence on the increase of
economic efficiency and represent a pre-condition for achieving economic growth
and development.
The state has a comparative advantage when implementing the property rights
for many reasons. At first, the state has a legal jurisdiction over the whole territory.
With this, it overcomes the problem with coordination which appears with the
private provision of property rights. Further, the state has the right to force matters,
and by doing so it can impose its own decisions. Third, the states are in permanent
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