Controversies on methods of institution measurement

Abstract

The goal of the paper is to present the methods of institution measurement and their weaknesses. The lack of precisely formulated definition of institution comes from different theoretical backgrounds which cover not only neoclassical economics, but also elements of sociology, psychology, manageinstitution and related measurement method. Therefore the different competitiveness criteria represented by well-known institutes used to institution appraisal are misleading. For instance, the international trade measurement methods cannot be compared with the budget measures and with the economic rise methods. They are incomparable among themselves, because of different theoretical background. However, they are comparable among nations. Therefore the competitiveness criteria covering different theoretical background have incomparable measurement methods. The measurement methods in law are different from measurement methods in psychology, sociology etc. The conclusion is, the outcome of competitiveness measurement methods represented by the WCY IMD and the other institutions should be treated as entrance knowledge useful in international comparisons. Such analysis should be deeper on the macroeconomic level.