This doctoral dissertation aims to examine the interaction between economic policy and institutional structures. Institutions, both formal and informal, play a fundamental role in shaping the credibility, design and implementation of economic policy. In recent years, many countries have adopted mechanisms such as fiscal rules, independent fiscal councils, and oversight bodies to enhance transparency, accountability, and long-term stability. International organizations, particularly the International Monetary Fund (IMF), have also supported institutional reforms, especially in countries where domestic governance structures are weak. In such cases, the IMF’s involvement reflects the need to fill institutional gaps and to enforce fiscal discipline where national institutions are not functioning effectively.

The study examines how institutional arrangements affect the effectiveness of economic policy, taking into account both domestic frameworks and the role of external actors. Using cross-country data on governance quality, institutional characteristics, and macroeconomic indicators, the research investigates whether stronger institutional capacity is associated with more stable and effective policy implementation. A central aspect of the analysis is public trust in institutions, which is considered critical for the legitimacy and success of economic measures. The dissertation specifically examines whether institutional trust enhances the effectiveness of policy reforms and contributes to improved economic outcomes. In this way, the study seeks to contribute to a better understanding of how institutional strength and societal trust shape the outcomes of economic policymaking.