The study of the dual effects of institutional environment on economic growth
Subject Areas : Applied Economics
محمد رضا شریفآزاده
1
(
ندارد
)
رضا زیاری
2
(
مسئول مکاتبات
)
Keywords: institutional environment, institutional quality, Economic growth,
Abstract :
Institutional environment is one of the most important elements of the institutional framework which forms an economic system. Institutional environment is a set of institutions. Institutions are like the rules of the game in a society. Institutional environment refers to the composition and the arrangement of those rules. An economic system is based on the institutional environment and will continue. In fact, the institutional environment provides the rules of the game, both for the mechanism of the government and the market and moreover it determines the relation between the government and the market in the economic system. This study gets help from the institutional economic approach and in order to study the economic performance in selected countries, the recently developed criterion of institution quality ( IQ) has been applied. The result would be like this: the institutional environment would have dual positive effects (direct and indirect) on the economic performance, if it meets our expectations. This means that the institutional environment has considerable impact on the economic growth through both efficiency and improving the formation of the capital. This impact varies according to the institutional quality of the countries.
