Impact of informal institutions on social innovation

The purpose of this study is a comparative analysis of the use of formal and informal economic institutions in the development of social and innovative activity. Institutional support of social and innovative activity was analyzed as an object of research. The subject of the research is economic relations between society and individuals on the formation and development of social innovations. The research method is a comparative analysis of the use of formal and informal economic institutions of social and innovative activity. Definitions of formal and informal institutions of social and innovative activity are given. Formal economic institutions should be understood as the codified rules or norms of interaction between economic agents in the presence of control over the implementation of these norms. Informal institutions are understood as the construction of interrelated, yet not fixed in a symbolic form, non-codified norms and rules governing various spheres of society. The factors of restraining the development of social innovations in the environment of formal economic institutions are determined. Such factors include conservatism of economic entities, minimal state support of socially-oriented innovations, lack of information of participants of economic relations about social projects, minimal investments of private capital in social projects, etc. Based on the comparison of the characteristics of formal and informal institutions, the priority impact of the latter on the development of social innovations is shown. That is, the most appropriate institutional form for social innovation is an informal institution, characterized by a flexible structure, high speed of application of changes and the possibility of further legalization. The substantiation of the influence of informal institutions on the development of social and innovative activity is demonstrated. The presented analysis of some modern socially-oriented innovations leads to the conclusion that most of the projects are informal and represent a direct alternative to the existing institutional systems. It is concluded that formal economic institutions can not actively stimulate the development of social and innovation activities, so institutional gaps «closed» through the use of informal rules, and therefore develop informal institutions of social and innovation

Keywords: economic institutions, social innovation, formal institutions, informal institutions


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