CHANGES IN THE INSTITUTIONAL ENVIRONMENT IN THE CONTEXT OF THE NETWORK ECONOMY
Journal Title: Держава та регіони. Серія: Економіка та підприємництво - Year 2018, Vol 5, Issue 104
Abstract
The research paper deals with the essence of the network economy and the significance of the transformational changes in the institutional environment to ensure its development. It was established that the development of information and communication technologies determines the state’s need for implementing positive changes in the institutional environment and the introduction of international best practices in establishing political, economic, legal, and social rules of conduct and standards. However, the analysis of the main indicators of the transformational changes in the institutional environment on a global scale indicates that the weakness of the institutional environment in most countries impedes economic development and is a global problem. It was stated that the institutional environment is a fundamental factor of competitiveness that can ensure a complete transition to a network economy, and at the same time, in developing countries, the main constraining factor of economic development is the slow changes in the institutional environment. It is revealed that the main factors that do not provide positive transformations of the institutional environment are the lack of transparency in the activities of governments and the public sector, corruption, instability of state policy, excessive state political regulation. It is noted that excessive burdensome state regulation, which results in increased transaction costs, reduces the level of accountability, adversely affects the activity and development of SMEs in the countries, serves as a deterrent to the development of the institutional environment, and this creates the basis for corruption and arbitrary decisions, which is reflected in a close relationship between the assessments of government regulatory policy and government transparency assessments. It is concluded that the development of information and communication technologies leads to the state’s need to implement positive changes in the institutional environment and the implementation of international best practices in establishing political, economic, legal, social rules of conduct and standards, while the lack of transparency in the activities of governments and the public sector, corruption, instability of the state politics, excessive state political regulation act as a deterrent to the positive changes in the institutional environment, and therefore, the network economy and the sustainable development of countries as a whole.
Authors and Affiliations
M. V. Shashyna
Keywords
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