Özet:

Economists describe how institutional analysis becomes more helpful in understanding human behavior and interactions. As institutions are the game rules in society, and organizations can be considered the players, the purpose of the regulations is to define how the game is played. Thus, institutions identify and limit the number of alternatives of individuals. Likewise, institutions include any form of restriction that human beings formulate to structure human interaction. Hence, the institution analysis is the key to understanding society's evolution and economies' performance. This paper aims to look at the economic role of political institutions. It explores the role of political institutions in shifting economies. To this end, the paper starts to review the concept of institutions, the theoretical framework, and various institutional economics approaches. Then, it describes the role of political institutions in economic performance. This study suggests that a set of decisions that institutions have made, and institutions' governance may impact economic performance. Furthermore, the institutions' quality could play a considerable role in economic performance by setting rules that allow actors to make choices and achieve economic performance in light of these rules. Finally, this paper suggests that further empirical research could be done to understand this role better.

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