Sociology of Economic Life

KEYWORDS: 
Institutions, Economic Systems, Capitalism, Socialism, Property rights 
I. INTRODUCTION 
According to cross-country empirical assessments paired 
with micro-level studies, institutions are enormously 
significant in anticipating the stage of progress in countries 
around the world (Daron Acemoglu, Simon Johnson, 2001); 
(Cavalcanti & Novo, 2005). Property rights protection, 
effective law enforcement, and efficient administration, as 
well as a variety of norms and civic mores, have all been 
related to greater economic performance over time. The goal 
of this essay is to highlight the importance of institutions in 
economic development and to support the arguments made. 
It asserts that institutions support economic development by 
influencing the price of financial transactions, the 
appropriability of rate of return, the degree of exploitation 
and confiscation, and the extent to which the setting is 
favorable to cooperation and increasing social capital. 
Literature, country analyses, and micro-level examples 
provide proof. 
What direction should the economic systems profession take? 
What are the future directions of economic systems research? 
After the former socialist economies of Eastern Europe and 
the Soviet Union collapsed, these questions arose frequently. 
Because these socialist economies have vanished, research 
into them has become a historical study with little relevance 
to contemporary issues. For some time, the former socialist 
economies' transition processes have provided important 
research topics, attracting some economists from other fields 
to the field of transition economists such as (Zilibotti et al., 
1999); (Aghion et al., 2020). However, most East European 
economies are nearing the end of the transition process, and 
research topics on transition policies, such as privatization 
and liberalization, appear less frequently in academic 
publications after these policies have been implemented. 
It's also worth noting that political economy is subdivided 
into a subfield within capitalist systems. In the preceding 
classifications, one word appears several times: systems. 
Furthermore, five words appear to explain the study's objects: 
capitalist, socialist, transitions, institutions, and comparative. 
The objects of the study are capitalist, socialist, and 
transition, and "comparative" is a research method and thus 
not unique in and of itself. As a result, the remaining two 
words—systems and institutions—appear to be the most 
important concepts that can distinguish the field from others 
in economics (Kim, 2012).