The question of how institutions shape the economic development of countries and influence the prosperity of states and societies has been at the centre of attention within economics in recent decades, as confirmed by the 2024 Nobel Prize in Economic Sciences, which was awarded to D. Acemoglu, S. Johnson and J. Robinson. Their work shows that the quality of political and economic institutions, the rule of law, and the distribution of political power are not just matters of the political system, but can have direct consequences for long-term economic development.
In this lecture, Academician Petrović will address the relationship between the concentration of political power, the quality of economic institutions and long-term economic development, with a focus on Serbia. Particular attention will be paid to the extent to which Serbia’s backsliding from electoral democracy to electoral autocracy over the past decade, as indicated by relevant international indices, has potential economic consequences. It will be considered whether the weakening of the rule of law and a market economy fair-play, coupled with rising corruption, constrain the development of the domestic private sector and contribute to its under-investment, as well as to which extent weak institutions can explain the low level of technical progress, which is crucial for long-term economic growth and prosperity.
While focusing on Serbia the lecture will have a comparative perspective, including the countries of Central and Eastern Europe, particularly Hungary. Additionally, the findings of a broader analysis of European countries will be presented, which indicate a correlation between the level of per capita income, technical progress, and the degree of the rule of law. This way, the lecture connects Serbia’s experience with broader international comparative findings on the importance of the quality of political and economic institutions for long-term economic development.
Academician Pavle Petrović is a professor emeritus at the Faculty of Economics in Belgrade, where he taught econometrics and macroeconomics, while he also served as the President of the Fiscal Council of the Republic of Serbia (2011-2024). His area of interest is quantitative research in macroeconomics and macroeconomic policies: fiscal and monetary. Petrović publishes in leading international journals, including the Journal of Comparative Economics, the Journal of Macroeconomics, and the Cambridge Journal of Economics, and is a reviewer for most of them. He has been a visiting researcher at Harvard, Princeton and Cornell universities. He was the editor of the Quarterly Monitor of Economic Trends and Policies in Serbia (2007–2011) and collaborated intensively with the governor of the National Bank D.Avramović (1995–1996) and, at his invitation in 2000, led a project on economic stabilisation and the necessary reforms in Serbia, in which fiscal reform played a significant role. During 2001–2002, he was Assistant Minister of Finance of the Government of the Republic of Serbia, responsible for macroeconomic and fiscal policy, and in 2003, he was Chairman of the Council of the National Bank of Serbia.