Abstract: Institutions are a part of the social order of society and they govern behaviour and expectations of individuals, while at the same time they regulate business operations and ethics. In fact, the morality of institutions is guaranteed by the process of social evolution. On the other hand, the role of business in society is an important aspect of leadership and not in conflict with profitability and economic growth. The role of business in society is in fact the challenge of what is called “corporate social responsibility”. The aim of this paper is to critically discuss the interrelations between institutions, business, and society by closely looking at the way institutions operate in terms of guaranteeing economic development, their role in building social structures and improving social development, and their contribution to the overall process of establishing a tight link between the economy and social welfare.
Keywords: institutions, economic development, social development