Institutional dysfunctions as a factor of convergent-divergent institutional development of post-socialist countries

Abstract

The article examines the causes, nature and consequences of institutional dysfunctions that arise in the process of market transformations of post-socialist economies, as well as how they affect the institutional development of these countries. A comparative analysis was conducted on the conceptual and methodological basis of modern economic transitology and new institutional economics using such statistical methods as comparison of averages, graphical, correlation analysis, and clustering. The results of the analysis revealed the convergent-divergent nature of the institutional dysfunctions impact on institutional development of post-socialist countries. In particular, the similarity of changes in averages of such development indicators was observed, which indicates the existence of a cluster (convergent-divergent) relationship between 19 analyzed post-socialist countries during the second decade of the XXI century. The convergence of institutional development trends is determined both by the general strategic orientation of systemic market reforms and by the geopolitical, territorial proximity of countries, their membership in regional associations. Clustering of countries through the use of Euclidean distance found that due to differences in institutional development rates of post-socialist economies over the past ten years, the number of clusters has increased, indicating the divergent institutional development of these countries. It is due to the degree of congruence of the prevailing informal institutional environment in countries with the implemented institutional modernizations, which creates various complicating, inhibitory and contradictory institutional dysfunctions or traps that should become an object of further institutional reform.