Mimo Draskovic

University of Montenegro, Kotor, Montenegro,

rookie@t-com.me

TESTING THE LEVEL AND FACTORS OF INSTITUTIONAL RATIONALITY IN MONTENEGRO, SERBIA

AND BOSNIA AND HERZEGOVINA

Sanja Bauk

University of Montenegro, Kotor, Montenegro,

RWTH Aachen University, Aachen, Germany,

bsanjaster@gmail.com

Milica Delibasic

International University of Travnik,

Travnik, Bosnia and Herzegovina,

23.mildel@gmail.com

Abstract. This paper analyzes the perception of the respondents in Montenegro, Serbia and Bosnia and Herzegovina regarding the level of institutional rationality and the deficit of basic selected factors that have a predominant impact on it. It uses and explains the conditional notion of institutional rationality as a specific form of bounded economic rationality. It starts from the basic hypothesis that during the long-lasting transition process there were four groups of inhibitors to the introduction and development of institutional rationality in the mentioned countries (rule of law, institutions, civil society and opportunistic behavior), the reason being their deficiency (underdevelopment). From the basic hypothesis, an auxiliary one arises - that overcoming the deficit of the mentioned inhibitors would have a direct and decisive impact on the increase in the level of institutional rationality, and thus, the impact on economic development. This primary hypothesis is experimentally proofed throughout appropriate multiple linear regression analysis.

Received: December, 2015

1st Revision: March, 2016

Accepted: May, 2016

DOI: 10.14254/2071- 789X.2016/9-2/2

JEL Classification: P37, C39

Keywords: institutions, institutional rationality, alternative institutions, opportunistic behavior, regression analysis.

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