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Univerzitet u Zenici
  Doctoral theses defended at the University in Zenica

Date and place of thesis defense:
14.11.2009., Zenica. Faculty of Economics
mr. sc. Jasmin Halebię
prof. dr. Azra Had¾iahmetovię

Thesis title:

Role and significance of economic institutions in economic development of Bosnia and Herzegovina


Economic institutions have a significant influence on the path and dynamics of economicdevelopment in the long term. Countries in transition face a big challenge in creation newinstitutional structures in order to improve the institutional immaturity of their economicsystems.In this study, property rights, transaction costs, and enforcement characteristics areconsidered important indicators which provide a basis for quality assessment of the economic
institutions of a country. Improvement in these areas could, ceteris paribus, enhanceeconomic development. This study includes a critical review of the relevant publications onunderstanding economic institution with the purpose of throwing light on this enormouslypertinent concept. The impact of economic institutions on economic development in Bosniaand Herzegovina has been also initially explored. This analysis has confirmed and broadened

the prior knowledge about significance of economic institutions in the enhancement ofeconomic development. Meanwhile, the institutional structure in B&H is inflexible; meaningthat economic institutions cannot respond and adapt totechnological advancements orexternal shocks such as economic crises. This study confirms that the level of improvementin economic institutions in B&H is below the regional average. In addition, path dependenceis a burden on the creation of a more efficient institutional structure in B&H. Therefore,B&H lags behind most countries in the region.Unfortunately, this knowledge does not lead toa direct and radical reform of the economicinstitutions. Since economic development is the main goal of modern economies, the demandfor more efficient economic institutions is a salient phenomenon in most developingcountries. However, inefficient economic institutions are among the stylized facts of thesecountries and, at the same time, one of the causes of their economic backwardness incomparison to the average level of economic development in the world. Change ininstitutional structures is affected by numerous factors, some of which are discussed here:individual ideological views, social capital, business integrity, quality of the judiciary,knowledge about better-performing countries, and information flows. Higher values of thesefactors contribute to the progress of institutional change and lower values act as a hindrancein the process of institutional change.

Key words: economic institutions, economic development, Bosnia and Herzegovina, macroeconomics

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