Transformations  in
Business & Economics

DEFICIT IN THE RULE OF LAW AS AN INSTITUTIONAL PHENOMENON IN THE COUNTRIES OF SOUTHEAST EUROPE
Minja Simovic

ABSTRACT. The subject of this paper is the existence of a deficit in the rule of law as a braking factor in the development of Bosnia and Herzegovina, Montenegro, and Serbia (SEE countries). The aim of the paper is to quantitatively analyse the impact of four independent variables on the basis of a hypothetical theoretical approach and relevant questionnaires: a) negative impact of insufficient specification and protection of property rights, as well as poor contract protection, b) negative impact of alternative institutions, social pathology and institutional violence, c) negative impact of opportunistic behaviour (corruption, rent-seeking, privileges, crime, managerial malfeasance, and more), and d) negative impact of domination of politics over the economy (or: non-limited government powers) as the dependent variable, which we defined as the "level of deficit of the rule of law". The paper starts with the hypothesis that the factors defined by independent variables dominantly influence the manifestation and maintenance of the rule of law deficit as a key development boundary. Multiple regression linear approach was methodologically applied to the sample of 270 selected respondents in the three observed countries. The results have confirmed the validity of the hypothesis and, consequently, the need for significant social reforms in the part of independent variables, which would lead to the reduction of the deficit in the rule of law.

KEYWORDS:  rule of law deficit, multiple regression linear approach, Bosnia and Herzegovina, Montenegro, Serbia.

JEL classification:  E26, O17, P37, C25.