INSTITUTIONS, EDUCATION AND INNOVATION AND THEIR IMPACT ON ECONOMIC GROWTH

The aim of this article is to provide a closer look of the institutions, their development, education and innovation and their impact on economic growth. The postulates of the neo-classical economic growth theories consider the accumulation of human capital and the technological development as factors that promote economic growth. Thus, investing in education, R&D and innovation is essential for a country's prospects for economic growth. However, the main idea is to present this topic from institutional point of view. By using literature and statistical analysis, the article investigates whether the degree of institutional development in country's educational system is sufficient enough to create prospects for economic growth. We compare four different countries: Macedonia and Serbia as non EU countries and Bulgaria and Slovenia as EU member countries. We perform two analysis - the first one is comparison of selected statistical data, and the second one is comparison of the Human Development Index for the four countries of interest. The research findings indicate to the fact that institutionalized society with higher degree of institutional development in this case in the educational system is more likely to boost the economic growth. The results also indicate to the fact that societies in which the degree of institutional development is higher, as it is in our case in Slovenia and Bulgaria, are more likely to produce well qualified and skilled labour force which will further impact the economic growth.