Transformations  in
Business & Economics

The Role of the Institution of Property in the Economic Transformation and Development Process in Central and Eastern Europe
Ramona Frunza

ABSTRACT. In the present paper, the emphasis is laid upon the evolution of the institutional change process that occurred in the countries of the Central and Eastern Europe, after the fall of the communist regime in the area, the main purpose being that of grasping its significance for the economic development. The transition process has generated structural modifications in these countries, which were especially reflected at the level of the formal institutions (adjustments regarding the functionality of the free market, the contractual relationships, the compliance of the law primacy and the property). Obviously, certain transformations were manifested within the informal institutions as well (the organizational culture, specific customs of the geographical space) and although the influence of the latter, for sure, does have repercussions to a certain extent on the economic development, the evolution of the informal institutions is the one which is determined, to a greater extent, by the dynamics of the formal ones.

That is why the main purpose of this paper is to achieve an empirical analysis, which will take into account indicators such as: the level of compliance with the private property right, the GDP/capita, the governmental expenses for the protection of the property and the application of the law. Based on this analysis, is expected that the research results to highlight the manner in which this specific institution will influence the growth paths in the Central and Eastern European countries and consequently, to lead to the increase of the awareness degree regarding its importance.

KEYWORDS: institution of property, institutional change, economic development process, Central and Eastern Europe.

JEL classification: O1, O5, R1.