On December 20th, Dr.Necati Aydin from College of Business and Ms.Rima Alhammadi, MBA student, made a presentation to diverse audience of top government officials, business leaders, and academicians on the following subject: Transforming Saudi Economy through Vision 2030: Guiding Lessons from New Institutional Economics. New institutional economics (NIE) places great importance on social, cultural, and legal norms and rules in understanding transformational long-term economic development.
It defines institutions as the rules of games while organizations as players who partake in economic transactions based on those rules. Institutional economists believe that it is impossible to bring long-term lasting economic transformation without developing necessary formal and informal institutions. According to Douglas North, receiver of Nobel Prize for his contributions to institutional economics, the core issue of economic development is “to account for evolution of political and economic institutions that create an economic environment that induces increasing productivity” (North 1991).
That is because institutions set right incentives for better economic performance. In the first part of presentation, Dr.Aydin presented the learned lessons from new institutional economics for Vision 2030 in terms of necessary formal and informal institutions for the long-term transformational economic development. He particularly highlighted key policy recommendations for Smart Saudization through setting right incentives and transformative institutions.
In the second part, Ms.Rima Alhammadi shared the findings of an empirical study testing the importance of ten institutional values on the economic development of ten OECD and ten Muslim countries. Dr.Hayat and Dr.Bajis were among the audience. Dr.Bajis was very happy to witness this successful event. He said that ”I could not be prouder to have one of our second year MBAs address the who is who in SAMA’s establishment. Rima should be proud of her achievement; I think she is going to have a great future and I encourage her to pursue her Ph.D. in a top USA university.”
