The purpose of this study is the analysis of the new institutional economics according to
parameters and criteria that affect the growth and economic development such as free movement of
capital, contract enforcement, information costs, risk transfer costs, free competition and their
application into practice. Institutional innovation, in terms of establishing more efficient and effective
institutions, can only be done if there is support of the whole society, but given the limitations set
forth in Kosovo, as possible change of the Constitution, some laws and other internal and external
restrictions, the achievement of this goal is difficult. Because of the very specific and serious past,
and also very long delay in the process of transformation and transition, the economic development
and new institutional economics in Kosovo, according to almost all development indicators has
significantly stagnated in comparison with the countries of the European Union and Western Balkans.
Economic growth and development implies a very complex and multidimensional process,
influencing many factors such as economic, technological, institutional, political, social and cultural.
Economic growth depends on political institutions and their capacity to define in a more clear and
acceptable way its common goals. Given the political dimension of the capacity of the state, certainly
should be considered also the institutional approach of development i.e. political dimensions of the
institutions that support economic development