Abstract
The essay is based on the knowledge that institutional quality may influence economic performance. From this viewpoint, it is possible to demonstrate that under certain circumstances, governmental policy is able to increase economic efficiency and performance by creating, maintaining, and cultivating suitable social institutions. However, this approach does not imply the enforcement of the dominant role of the state, but rather the effort to accept and/or to cancel measures, which substantially affect the long-term potential of the economy. It is a concept of the guarantee and the co-creator of the basic rules and institutions. The authors also point to the effect of informal institutions, which undoubtedly form the basic social environment. The paper is structured as follows: After looking back at the history, the second part focuses on new institutional economics, whereas the third and fourth part deals with the definition and classification of institutions. The following chapter seeks to summarize the main direction of the effect of institutions. The final part presents an overview of a number of studies, which were focusing on the relationship between the quality of the institutional environment and economic growth, it also outlines fundamental institutional quality measurements and provides a set of several basic institutional quality indicators.
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