Transformation of State Governance from the New Institutional Economics Perspective

The transformation as experienced by the countries of Central and Eastern Europe validates those premises, formulated by the new institutional economics (NIE), that stress the importance of the sphere of politics and informal institutions for the creation of effective markets. The success of transformation depends on the degree to which the principles of the rule of law together with the habits, traditions and mentality correspond to the formal conditions of market economy. Corruption is, however, one of important factors that slow down the process of building the new system of motivation as well as the adjustment of informal behavioural rules to the institutions of capitalist economy. Realistic assessments of the state's economic activities, that form the basis of NIE, support the liberal doctrine of the role of state in development and transformation. The article presents transformation processes in Poland against the background of NIE premises and studies of international institutions.