Faculty of Economics

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Author: search.filters.author.Merdzan, GunterSubject: search.filters.subject.Economic growth

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    The Impact of Political Institutions on Economic Growth in Post-Transition Europe
    (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, 2025-12)
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    Bojadjieva, Daniela
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    The Role of Institutions in the Economic Growth of OECD Countries
    (2024-12)
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    This paper analyses the role of institutional quality in determining the economic growth in the OECD countries from 1995 to 2021 concerning the institutional economics framework developed by North (1990) and further advanced by Rodrik (2000) and Acemoglu et al. (2005). Institutions are viewed as the formal and informal structures that regulate economic, political, and social activities and are considered the key to influencing economic performance through the minimisation of transaction costs, encouragement of innovation, and human capital development. The theoretical framework assumes that inclusive institutions foster sustained economic growth while extractive institutions stifle development by consolidating power and assets. This paper hypothesises that institutional quality positively influences economic growth in OECD countries. Using panel regression models and Employing the Fraser Institute’s Economic Freedom Index and the Heritage Foundation’s Index of Economic Freedom as measures of institutional quality, it examines how government size, property rights, regulation, and trade freedom affect growth. The findings reveal that institutional quality has a positive but varying impact on economic growth. In particular, small government, low taxes, and good monetary policy are positively related to higher growth rates. However, factors such as property rights and trade freedom have either weak or negative coefficients of correlation with growth. The results suggest that fiscal prudency and sound money supply policies are conducive to growth, but other institutional factors are not as straightforward in their influence on growth. This study is useful for policymakers who wish to improve economic growth through institutional change.
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    Corruption, Government Spending and Economic Growth: The Case of Central and Eastern Europe
    (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, 2023-12-15)
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    Kozeski, Kristijan
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    This study delves into the relationship between corruption, government spending, and economic growth in selected Central and Eastern European countries. The high prevalence of corruption and suboptimal allocation of public resources in these countries present a significant obstacle to increasing economic growth. These issues are particularly impactful in low and middle-income countries, where corruption persists longer. The effects of corruption can distort market signals and lead to inefficient allocation of resources, especially in the public sector. In addition to hampering public consumption, corrupt practices negatively impact a country's ability to increase economic growth and bridge the gap between high and low-income countries. By utilising fixed and random effects methods, this paper employs panel regression analysis to examine the impact of government spending and corruption on the economic growth of selected Central and Eastern European countries from 2011 to 2021. The study found that government spending, corruption perception, and control of corruption have a positive and statistically significant influence on economic growth in the selected countries.
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    Public Debt and Economic Growth – The Case of the Republic of North Macedonia
    (Faculty of Economics in East Sarajevo, 2021-06-15)
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    Establishing and maintaining macroeconomic stability and fiscal discipline on the one hand, and stimulating economic activity, by enhancing the quality of public finances, increasing capital expenditures, and enhancing competitiveness in the Macedonian economy, on the other hand, are two opposing objectives that should be pursued by policymakers. Government borrowing, especially foreign borrowing, is an important source of fixed assets to cover public expenditure. However, the sustainability of public debt depends not only on the level of public debt, but also on the structure and successful implementation of policies to boost economic growth. Borrowing for a country with low economic potential and a constant shortage of capital is inevitable, especially external borrowing. However, the structure, purpose of the assets and their multiplier effect on the overall economy are the main criteria for assessing the impact of public debt on the economy. This paper attempts to apply the econometric VAR analysis to examine the correlation and causal relationship between public debt and economic growth rate of the case of the Republic of North Macedonia for the period 2002 - 2017. The variables to be analyzed are: GDP growth per capita, Public debt as a proportion of GDP, Gross Domestic Investment, Interest Rate and Government Spending. For the purpose of this analysis, a Granger causality test has been conducted. The test results indicate that the impact of public debt growth in North Macedonia does not have a significant impact on GDP growth per capita. The other test that is being conducted is a Vector Error Correction Model which shows that public debt is negatively correlated with short run and long run economic growth.