Institutional economics and economic growth: the role of formal and informal institutions

Abstract

The article examines the impact of formal institutions (laws, public administration, the judiciary) and informal institutions (traditions, cultural values, social norms) on economic growth within the framework of institutional economics. Drawing on the work of D. North, D. Acemoglu and J. Robinson, it analyses the role of institutions in the economic development of Uzbekistan and other transition economies on the basis of statistical data. Spearman rank correlation analysis across twenty countries revealed a moderate positive association between the property rights index and GDP growth (r = 0.61; p < 0.01). The case of Uzbekistan shows that, as a result of the 2016–2025 reforms, utilised foreign investment reached USD 43.1 billion in 2025, GDP grew by 7.7%, and the Corruption Perceptions Index score rose from 21 to 31. The shadow economy and informal corrupt norms remain the main factors limiting the effectiveness of reforms.