Institutional Quality as a Determinant of Economic Growth: Analyzing GDP Trends in Western Balkan Countries

Introduction: The main goal of this paper is to investigate the influence of the quality of (economic) institutions according to the data from the World Bank's specialized Worldwide Governance Indicators database on the gross domestic product per capita of 7 Western Balkan countries: Albania, Bosnia and Herzegovina, Montenegro, Croatia, North Macedonia, Serbia and Kosovo. Methods: We applied Correlation and regression analysis were used for the set of mentioned data for the period from 2008 to 2022. Results: The analysis showed that the indicator of the dependent variable (GDP/pc) has a statistically significant strong positive relationship with all indicators of the independent variable (quality of economic institutions), while the regression model determined that only the constant term and Rule of Law are statistically significant. Discussion: The results of the research can serve to better understand the relationship between institutions and economic growth, and as such can be a starting point for future policies aimed at improving institutions and economic growth in Western Balkan countries.