Development of Formal and Informal Institutions in the Czech Republic and Other New EU Member States Before Their EU Entry: Did the EU Pressure Have Impact?

The paper compares the quality of the institutional framework of the Czech Republic with other new EU Member States and the EU 15 average using the World Bank data on Governance Indicators and argues that the pressure from the EU institutions during the accession negotiation period to reform the legal framework was not sufficient to improve significantly the business environment. Among factors that prevented the improvement of institutions the influence of strong interest groups, ineffective enforcement of legal rules and corruption are discussed and empirically illustrated using data on 'state capture'.