engleski

Alternative Reform Approach in Transition Countries and the Role of IFIs

How to provide alternative set of policy guidelines for promoting development cross-national studies show that institutions are the single most important determinant of long-term economic development. Universal principle of economic management - there is no unique institutional arrangement or policy prescription - eg. debt sustainability, fiscal prudence and sound money, are also obviously compatible with diverse institutional arrangements (institutional diversity). Globalisation is not problem per se - but with the agenda that governs it at present - enhancing liberalization and financial markets ignoring legitimate needs of transition countries to have their own strategies and polity space. After decade and more of neoliberal economic policies ruled by IFIs in transition countries the results are not promising - the success have taken place in countries which have violated neoliberal rules even moving in a more market-oriented way. Wrong formula: blueprint institutions+trade liberalization+liberalization of capital flows=decreasing economic growth. The key is institutional quality, but they are much result of economic prosperity as they are their cause (even empirical evidence shows determining effect on aggregate incomes).

Institutions; formal and informal institutions; institutional diversity; IFI

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