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INSTITUTIONAL IMPROVEMENT: BENCHMARKS WITHIN EASY GRASP

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Nežinský E., Fifeková E.
Ekonomický časopis (Journal of Economics)
|
2024
|
vol. 72
|
issue 9-10
479 – 494
EN
The 2024 Nobel Prize in Economics has confirmed the importance of institutional quality in driving economic performance and framing ongoing trends. We demonstrate the importance of institutional quality and assess institutional quality of CEE countries with additional focus on the V4 countries via composite indicator under benefit-of-the-doubt aggregation weighting scheme. We investigate benchmarks in six dimensions of institutional quality World Governance Indicators as a result of employing two nonparametric performance-frontier estimation techniques. Without specifying preferences or adjustment costs, both the conventional approach and the “closest target” procedure offer decision makers a choice from a Pareto-efficient set of targets. In setting policy goals, major trade-offs should be considered between ambitions for accountability and regulatory quality, on one hand, and government efficiency and corruption control, on the other.
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