The impact of inclusive and extractive institutions on economic development

The definition of the conceptual foundations of the institutional approach in the development economy based on positive and negative foreign experience is stated as the purpose of the study. The realization of the research goal is possible by setting and completing tasks: a critical assessment of the pragmatic application of institutional theory in the development economy; the development of author’s recommendations on the possibilities of using an institutional approach to economic growth factors in modern Russian economic conditions. The research used methods of comparative and systematic analysis, hypotheses, and scientific abstraction. The institutional plaque in the economic theory of development causes controversial assessments by experts in the field of macroeconomics and institutional economics, the scientific community. The impact of inclusive and extractive institutions on economic development has both positive and negative aspects for national and global economies. The result of the research is to substantiate the author’s position, according to which new institutions are formed when it is possible to generate income for society, which cannot be obtained in the conditions of the current institutional system. The role of organizational factors is more important than the role of technical factors. Innovation can only be considered as a component of economic development. All common approaches to identifying factors of economic development do not explain the reason for the interest of economic entities to invest in innovation and human capital. The institutional approach allows us to substantiate the role and place of institutions in the development economy.