Institutional Environment in the Context of Development of Sustainable Society in the European Union Countries

Abstract

For many countries the Industrial Revolution was an opportunity for a dynamic economic development, but it was accompanied by deep social changes. Inequalities between regions have deepened, pollution has increased and also conjunctural fluctuations have intensified. In contemporary view at the social welfare there is a tendency to abandon identifying it with the level of income. Also, the research on the causes of socio-economic success is developing. One of the aspects of the research, which the article refers to, is the role of the institutions (within the meaning of institutional economics) in the socio-economic development. The aim of the paper is to examine the relationship between indicators of institutional environment and indices related to socio-economic development. For the analysis of the institutional environment the indices published by the World Bank under the name of Worldwide Governance Indicators were used. The analysis of socio-economic level of the countries is based on Sustainable Society Index and its components, which include a wide range of factors related to well-being. The analysis was conducted in two stages. The first stage is a general study of the correlation between WGI and SSI for 151 countries from different continents. The second stage includes a more detailed analysis conducted for the European Union, using the cluster method and the analysis of the level of indicators in groups of countries. The study is based on the data from 2010.