Abstract:

Institutions are the focus of researchers in the fields of sociology, political science and economics. In each of them, attempts were made to describe and define what an institution is and what is its significance in specific social, political and economic conditions. Economic sciences undertook these considerations at the turn of the 20th century, and the precursors of defining institutions are Thorstein Veblen (The Theory of Business Enterprise, 1904), Wesley Clair Mitchell and John R. Commons. The initiated trend of institutional economics has evolved and it was not until the 1970s that it returned as new institutional economics (NIE). Its representatives include researchers such as Ronald Coase, Douglass Cecil North, Oliver Eaton Williamson, and others. The development of the new institutional economy verified and expanded the possibilities of explaining changes taking place in the economy and showed the importance of institutions and its influence on these changes. However, the complexity and multi-faceted nature of the institution's manifestations does not allow for a synthetic definition of the institution, but only for the formulation of specific approaches on the basis of the new institutional economy - as an organization, formal and informal institution, and a state of equilibrium. The role of institutions in the trend of the new institutional economy is to shape mechanisms regulating economic processes into stable and predictable systems supporting economic development.