The structure and institutions: a regional aspect of interaction in the economic system

Abstract

In the article with the help of two-sector model of the economic system, the interaction of national and regional economy is investigated. This interaction is observed from the position of development of material structure and institutions. As the key structural parameter of an economy, the proportion between sector of excess resources and sector of scarce resources is taken. The situation when sector of excess resources prevails over sector of scarce resources forms structural conditions for the creation of the market institutions. If a sector of excess resources is smaller than a sector of scarce resources, the conditions for the emergence of institutions of government regulation are formed. Two cases are analyzed: the first one concerns the situation of a simple national economy consisting of 2 provisory regions. The second is the case of the national economy consisting of many regions. The authors show that material structure of a total combination of regions defines institutions of the market or state regulation for the national economy as a whole. The institutions formed at the level of the national economy, can support or resist the development of structure of the region. The conditions are observed under which united institutions of the national economy contradict a development of structure of the individual region.

Keywords

• two-sector model of the region
• sector of excess resources
• sector of scarce resources
• structure
• market institutions
• institutions of government regulation (planning)
• influence of structure on institutions
• influence of institutions on structure.