THE CONTRADICTORY IMPACT OF INSTITUTIONAL CHANGES ON THE ECONOMIC DEVELOPMENT OF THE EUROPEAN REGION COUNTRIES

Анотація

The article describes the contradictory impact of institutional changes on the economic development of the European region countries. The article’s topic is a relevant theoretical problem within the framework of research into the new institutional theory, as it substantiates ways of realizing the negative impact of inefficient institutions on the process of economic systems development. The theoretical basis of the convergence and divergence of the development trajectories of economic systems in the context of the implementation of institutional reform is analyzed. The author notes that the process of institutional changes is not uniform and its result can be both effective and ineffective institutions, which become the basis of divergent trajectories of the development of economic systems. As a result of the theoretical analysis, the author substantiated the hypothesis regarding the contradictory influence of institutional factors on the socio-economic development of economic systems. The key institutional factors that can influence economic development are described such as property rights defence, access to capital, human capital, level of corruption, social inequality, economic policy etc. According to the results of the conducted econometric analysis of institutional indicators of economic development of the European region countries that is based on statistical data from recent years, it was empirically established that there is a convergent-divergent influence of institutional factors on the economic development of the European region countries. It can be explained because the institutional environments of analyzed countries have unique development trajectories that reflect complex and other convergent-divergent processes when the accumulated elements of the system create an individual unique integrity that differs from country to country. The author also warns that the described directions of Ukraine’s institutional reforming should not be carried out as an exception but purposefully in the form of implementing a long-term strategy for reforming all areas of social life.

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