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Having in mind the current global trends and the transition processes, it is necessary to explain the role, influence, and importance of institutions in providing conditions for economic growth and development. Theory has proven, and practice confirms, that the institutional structure (the way of forming institutions, decision-making process, decision-making effectiveness, and economic justification of goals) is one of the most important factors in achieving macroeconomic stability and economic development. This article explores the impact of the quality of institutions on the economic performance of the Republic of Serbia. A comparative analysis of the content of relevant institutional indicators and their economic effects shows the institutional matrix of possible misuse of political and economic institutions in the direction of realising short-term political goals, to the detriment of long-term sustainable economic growth and development of the Serbian economy.

Misuse of institutions and economic performance: some evidence from Serbia