Informal Institutions – Measurement and Comparison in European Countries

Abstract

This paper addresses the topic of informal institutions that remain an unexplored part of the institutional system due to identification, operationalisation, and measurement problems. The author concludes that there is a dire need to develop an approach to analysing the rules that govern entities’ behaviour that are difficult to comprehend, deeply ingrained, and long-lasting. Therefore, based on data from social surveys, the author has constructed ten indices of informal institutions comprising trust, happiness, bonds with relatives, social capital, interest in politics, tolerance, resourcefulness, religiousness, attitudes to work, and attitudes to traditional values. They present a comprehensible picture of countries’ informal institutions and enable the making of comparisons. Later, the author uses the indices to investigate the links between formal and informal institutions in selected European countries and explore their role in providing a stable environment conducive to economic well-being. This is, however, only an example in which informal institutions are vital, and the research can support further studies in various fields. The findings indicate which investigated institutions seem central and worth supporting and which co-occur with lower levels of development.

Keywords

• informal institutions
• formal institutions
• economic well-being
• institutional consistency