Why do development institutions not work?

The analysis of the conditions necessary for the proper functioning of socio-economic systems includes the principles of assessing the quality of existing and emerging development institutions as an essential foundation. Theoretical-economic research regarding direct and indirect connections between the quality of institutions, investments and the pace of economic development continues to be a topic of discussion both in the Russian Federation and abroad. This body of research is distinguished by the use of data for groups of developing countries with different indicators of key phenomena such as productivity, government spending and corruption in the analysis. This, among other factors, strengthens the relevance of comparisons in institutional development in OECD countries and emerging economies. The author emphasizes the inefficiency of development institutions created in the Russian economy in order to mobilize and provide incentives for private investment, and enable access to financial and informational resources. Their concentration is necessary for innovation-oriented economies. The paper reveals the essence of destructive changes in the technical and social spheres at times of the increasing capacity to produce qualitatively new goods and services in the global economic system. The lack of regulatory impacts of the Russian government in the absence of a coordinated socio-economic development model is proved. The goal of the existing model is to reduce the effect of government participation, which is not compensated for by the introduction of stimulation innovation processes of state economic policy instruments. By using the achievements of global economic thought, including research findings of German neoliberal economists, the author illustrates the spot exogenous interaction of regulators that produces a disincentive effect. The presence of such practices generates an additional effect of non-confidence in government institutions and strengthens investing inertia trends. The horizons for strategic business initiatives are being narrowed, since the risks involved in participating in development projects are increasing. The evaluation of government actions as inconsistent with the requirements of correcting market transactions that involve business structures contributes to the scientific novelty of the paper. The modernization of the research paradigm of technical and socio-economic development processes has practical implications in the process of transferring from solving the problem of market failure compensations to developing the concept of post-industrial state regulation. The paper justifies the need to change the model of government and business participation in the framework of medium-term and long-term strategies. In such a model, the state guarantees the stability of regulations in the long term by minimizing the share of budgetary participation in insurance of business losses. The role of the state is determined by guarantees of the real distribution of financial resources. Business, especially large-scale business, assumes the risks of investments with minimum participation from taxpayers.

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