Institutional Systems: Essence and Components

Theoretical foundations of institutional economics on definition of essence and content of the concept "institutional system" were further developed in the article. It is proved that institutions influence development of society and its spheres and sectors. Institutions which function in a society can accelerate or impede its development. Argued by author that development of theoretical foundations of research of institutional systems is the basis for justification and implementation scientific and practical recommendations on ways and means of institutional stabilization. The institutional system is defined as a set of interrelated and interacting complementary formal and informal institutes that operate in society. Its dual nature is reflected in creation of human interaction's basis and its restrictive framework. Institutes that constitute an institutional framework are divided into formal and informal by the formalization level. Typology of informal institutions on the basis of definition of types of interaction between formal and informal norms supplemented and expanded by author. It is grounded that the non-compliance formal rules and their replacement by informal evidence of the ineffectiveness of the existing institutional system of society. It is proposed to use the Corruption Perceptions Index as a proxy measure an estimation of quality the institutional system. It is concluded that an effective institutional system consists of an organic combination of formal and informal norms. Thus informal norms must not contradict formal norms.