INSTITUCIONALNI KVALITET I EKONOMSKI RAST U EVROPSKOJ UNIJI I ZEMLJAMA ZAPADNOG BALKANA

Abstract

Institutional quality represents a key factor of economic growth and European integration. This study empirically analyzes the impact of institutional quality on economic growth in the European Union (EU) member states and Western Balkan countries in the period 1996–2023, using data from the Worldwide Governance Indicators (WGI) database of the World Bank. The analysis encompasses 27 EU member states, including those that joined during the enlargement in 2004, 2007, and 2013, as well as the United Kingdom, which exited the EU in 2020. Additionally, the study incorporates Western Balkan countries – Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia – which are at various stages of the European integration process. The methodological framework is based on linear and exponential regression analysis, examining the interdependence between institutional factors and GDP per capita growth. The findings indicate that improvements in institutional quality significantly contribute to economic growth, with the strongest effects observed in countries that have implemented extensive institutional reforms as part of their EU accession preparations. While the positive impact of institutional quality is also evident in the most developed EU member states, it is particularly pronounced in countries that joined after 2004. The greatest potential for economic growth through the improvement of institutional quality has been identified in the countries of the Western Balkans, where reforms still play a key role in the process of European integration.