Role of Institutions in the Economic Development of Central and Eastern EU Countries

Abstract

Economic development of countries who experienced transition processes from autocratic regimes to democracy and the catching up of EU developed countries need to radical reform the institutional framework. The institutional quality can promote or inhibit development processes, especially in the countries that faced deep political, institutional and economic reforms and crises. This article intends to study the role and importance of institutions in the development process of Romania and other central and eastern EU countries and to identify the characteristics of the institutional framework exerting a stronger influence on the development. With this purpose we used data and information form different sources: World Bank statistics and reports, World Economic Forum Reports, reports of Legatum Institutes from London, scientific studies etc. We considered as useful the analysis of the nature and intensity of connection between institutional quality and the synthetic indicators of development. Romania and Bulgaria occupy the last two places in terms of development among the 27 EU member states, but they also register the lowest values for institutional quality. The quality of the institutional framework is strongly dependent on aspects such as: property rights (including intellectual property), illegal payments and bribe, the independence of justice, the efficiency of the legal framework, the quality of political leadership, the capacity of economic and social actors to exert pressure to eliminate and change inadequate institutions, the quality of the connection between institutions and the organizations that are meant to supervise it.