Concerning the Role of the Institutions in Modernization of Economy

In this paper we have made an attempt to comprehend the processes of modernization of our social and economic system in the light of the integration of institutional agents in neoclassical theory. From the angle of methodology this approach implicitly presupposes the determining of the combined effect of market competition and institutions on the improving social and economic systems. In the context of the experience, whose bearer are modernized economies – similar to the ones in the Western world – we have elaborated our thesis on the hindering effect of the “collectivist epoch” institutions in accomplishing the profound change in our country. This change is directed from the “periphery”, based on the retarded technological level, as well as on social collectivism as mutually conditioned phenomena, towards the formation of an environment fostering the demonstration of individual needs through competitive development in the global world.