Are New EU Member States Improving Their Institutional Effectiveness for Global Knowledge-based Economy? TOPSIS Analysis for the Years 2000-2010

The article is devoted to measuring the effectiveness of institutional systems of EU countries in terms of their relevance to the requirements of global knowledge-based economy. The main aim of the article is to evaluate the progress obtained by New Member States in the years 2000-2010. The second aim is to assess the impact of economic disturbances that could be seen in the global economy after 2007 on the institutional reforms of EU countries. The analysis is conducted on the basis of institutional economics - transaction cost theory. The empirical part is based on the modified TOPSIS method. Data from Fraser Institute has been used. The research suggest that the integration of Central European countries with the EU has influenced the improvement in the effectiveness of their institutional systems. Global crisis forced the European countries to implement regulations leading to some improvements of institutional effectiveness.