Institutional Change and Governance Indexes in Transition Economies: the case of Poland

Abstract

In the former communist countries, institutional change, i.e. transition towards market economy, is affected not only by introduction of law and formal institutions (change "by design"), but also by social norms, old values and habits (informal institutions). I present an empirical paper focusing on transition of the Polish Economy. I used a questionnaire which was administered to a sample of about 1000 Polish firms in order to verify the impact of economic institutions on the "residual productivity". Throughout the questionnaire I built six governance indexes. Then I tested the impact of the governance indexes on the productivity of firms. I observed that the economic performance of the eastern regions of Poland, where governance indexes are worse than western, are poorer than that of the western regions of Poland

Keywords

• formal and informal economic institutions
• trust
• transition economics
• governance indexes
• productivity