Institutions and economic policy

Abstract

The objective of this paper is to delimitate the field of application of institutional policy and of economic policy. My point is that institutions should not replace the tools of current economic policy. The basis of delimitation is classification of institutions and definition of the role they play. The need of changes of institutions, underpinned by decisive and durable changes in the real economy and society brings about a temptation to use those changes for current needs, which should be addressed by economic policy. I present the objectives and limits of institutional policy on the one hand, and of economic policy on the other. I underline that to ensure predictability of behavior of partners of transactions and thus for efficient functioning of markets coherence of formal norms between them and with informal norms, their stability and high quality of enforcement are necessary. In the following I present the active agents (authors) of each of those kinds of policy, and passive agents (those who apply them). I underline that some active agents of institutional policy may be vitally interested in fulfilling current objectives, and this may direct institutions to fulfillment of those objectives. I illustrate this on the example of the structure of the agents of institutional policy and of economic policy In Poland. I present also the examples of institutions functioning in Polish law which mostly play a role of in tools of current economic policy.(original abstract)