კონფერენცია

∘ George Berulava ∘
THE INSTITUTIONAL PREREQUISISTES OF THE ECONOMIC DEVELOPMENT PROCESS

Summary

The paper considers the role of market institution in the process of economic development. At present stage, the development of the efficient market system implies creation of the incentive structure that will stimulate businesses to invest in innovation and production activities rather than to ‘rent-seeking’ behavior. Such an incentive structure, in turn, is a product of viable institutions guaranteeing property rights, honoring of contracts and payment of credits, lowering of transaction costs and facilitating increase of the effectiveness of the market of production factors. Only under such conditions economic agents receive the possibility and stimuli for innovation, thus creating preconditions for steady economic growth.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ George Berulava ∘ THE INSTITUTIONAL PREREQUISISTES OF THE ECONOMIC DEVELOPMENT PROCESS Summary The paper considers the role of market institution in the process of economic development. At present stage, the development of the efficient market system implies creation of the incentive structure that will stimulate businesses to invest in innovation and production activities rather than to ‘rent-seeking’ behavior. Such an incentive structure, in turn, is a product of viable institutions guaranteeing property rights, honoring of contracts and payment of credits, lowering of transaction costs and facilitating increase of the effectiveness of the market of production factors. Only under such conditions economic agents receive the possibility and stimuli for innovation, thus creating preconditions for steady economic growth.