Institutional reforms.

Different institutions are related to each other, some of them are a prerequisite for the normal
functioning of others. These links are not always obvious and are often not taken into account.
emocratization can promote economic growth only at a sufficiently high level of legality
(Polterovich., Popov (2003)). Privatization does not make sense if private property is not protected.
The law on bankruptcy cannot work in a crisis of non-payment (Polterovich (1993, 2001)).
Speaking about institutions in the context of reforms, it is necessary to keep in mind two aspects.
First, it is necessary to ensure the compatibility of instituted institutes and existing ones. Secondly,
it is necessary to take into account the links between institutions when choosing the sequence of
reforms

However, carried out simultaneously, and even in the wrong sequence, they can cause serious
damage to the economy. So, The liberalization of prices and privatization in the statics are
complementary. However, price liberalization can also have an effect in the conditions of state
ownership, while privatization, conducted at strongly no equilibrium prices, inevitably leads to
negative consequences

A similar difference between static and dynamic complementarity occurs for the liberalization of
domestic prices and foreign trade. Once completed, these reforms can complement each other. If the
liberalization of foreign trade is conducted before the establishment of internal equilibrium,
economic losses are inevitable.

It is necessary to introduce standards for institutional design in order to achieve high quality of the
developed institutional trajectories. Reform projects should be created by experts in accordance with a
rigid framework, as a largest investment projects.

Polterovich, V., and V. Popov (2003). Stages of Development and Economic

Growth. Manuscript.

Roland G. (2000). Transition and Economics. Politics, Markets and Firms.

Cambridge, Mass.: MIT Press.

The need of structural reforms is usually associated with the decline of the country’s economy, a protracted
economic crisis. In a situation where the functioning of the national economy does not meet the
requirements of a decent standard of living, under pressure of production, the government of the country
is forced to take a series of extreme measures to change the state of the government’s economy with
structural reforms. (Mourougane and Vogel, 2008)
 Mourougane, A. and L. Vogel (2008), “Speed of Adjustment to Selected Labour
and Tax Reforms”, OECD Economics Department Working Papers, No.647, OECD
Publishing.

Reforms should be built on the following postulates about the ratios: 1) It is necessary to strive for wealth
to grow not by distributive methods, but by creative methods. We need to create more. 2) The society
grows faster in the long-term (!) Perspective if there is a uniform distribution of income. We must strive to
create a middle class. 3) Monopoly in politics and economy leads to stagnation. The balance of forces in
politics and economics must be competitive. Around these huge three postulates revolves a plural of
reforms, mini-reforms, legislative acts and other transformations. In order for all these transformations to
introduce, control, test and modify, a global economic IT modulator is needed. It will be a complex IT
system that will allow in virtual reality to test a proposal as close to reality as possible to an accuracy of 80-
90% (which is enough to make the right decision).