POKRETAČI EKONOMSKOG RAZVOJA: KULTURA, GEOGRAFIJA, INSTITUCIJE, MULTINACIONALNE KOMPANIJE
DRIVERS OF ECONOMIC DEVELOPMENT: CULTURE, GEOGRAPHY, INSTITUTIONS, MULTINATIONAL COMPANIES

Author(s): Jasmin Hošo
Subject(s): Business Economy / Management, Economic policy, Economic development
Published by: Akademija Nauka i Umjetnosti Bosne i Hercegovine
Keywords: economic development; culture; institutions; multinational companies; direct foreign investment;
Summary/Abstract: Differences in economic development around the world are significant. The country with the highest income per capita is Luxembourg, while at the end of the scale is Malawi. The question is: Why some countries such as Norway are so developed, and their inhabitants live in prosperity, while some African countries such as Burundi are so underdeveloped and live in poverty? Or: What drives economic development in different countries? Since the time of Adam Smith, many scientists and policy makers discussed this important issue. These discussions are reduced to a few explanations: (1) culture, (2) geography, (3) institutions, and (4) multi-nation companies. Scientists, such as Nobel laureate Douglas North, place the focus on institutions and argue that the institutions “are main determinants for the performance of the economy.” Since institutions provide the incentive structure of society, formal political, legal and economic systems have a significant impact on economic development by affecting the incentives and costs of doing business.

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