Institutions towards Governance: How this Aspiration Shaped the Figure in Algeria?

Abstract

The recent fall in oil prices on the international market seems an opportunity to arise the debate about the institutions' reforms in Algeria. In this context, the state is no longer able to continue its dependence on the oil revenues; but it should negotiate seriously with the productive economic sector. The attempt of this strategy is to mobilize the unused resources and establish a real and an efficient business organization. The new institutional economics offers an insight of the institutions quality and the governance in conducting the economic development.

Moreover, the process of the institutional reform in Algeria began in the late 1980s. The diagnosis has presented a success of the reforms that targeted the stabilization of the economy, as evidenced by macroeconomic performance of the economy since 2000s. However, the real boom seems stuck in the status quo because of the latent structural reforms of the economy.

This paper highlights the impact of the budget constraint considered as an opportunity to deepen the reform process and encourage the productive investment.

Keywords: institution, governance, budget constraint, Algeria