The Economic Growth of Albania during the First Postcomunsit Decade: The Economic Institutions Recomandations

1992-1996 was a very distinctive period for the relationship between EU and the Western Balkan countries, exceptionally for Albania. In the new way of market economies development, each country addressed their problems in distinct manners. The relevant politico-economic institutions, democratic decision-making bodies, central banking policies, the organization of privatization of industries, and the regulation of private firms – all had an impact in this first phase of transition period. When these institutions are inappropriate for the development of free market economies, one reaction in many countries is the spontaneous development of informal economies. One of the main strategies of stabilization and liberalization was privatization and the development of the private sector. The liberalization process, on the other hand, proved to be a complicated and delicate procedure with respect to both economic and social aspects. The economic growth in Western Balkans countries for the period 1992-1996 represents double standards, especially in Albania. This paper presents a study of the role of the informal sector in transition. The Albanian case is used to demonstrate some of the characteristics of this transition. This study seeks to present the economic growth of Albania during the first postcomunist decade. It will analyze the conditions for the informal sector to emerge in a transition country, to wit, Albania. The consequences of these conditions are reflected in the various appearances of the informal sector, and from the other hand are the institutions, that survived and tried to correct the situations. In the other hand the paper excamines the role of the economic institucions like European Bank for Reconstruction and Development (EBRD), the International Monetary Fund (IMF), the World Bank, etc. The analyses are based on the existing evidence which examines all the facts for the characteristics of developing economy in Albania and the report with the international economic institutions and their recommendations. DOI: 10.5901/ajis.2014.v3n3p39