Institutional risks in the modern regulatory environment: determinants and formation mechanisms

Abstract

The aim of the article is a comprehensive study of the processes of formation and evolution of institutional risks in the context of the growing complexity of the regulatory environment and substantiation of their impact on the resilience of the economic and financial management system. The relevance of the research is determined by the increase in regulatory burden, fragmentation of regulatory decisions, and transformation of management practices, which create new areas of uncertainty for economic agents and increase the sensitivity of the economic system to internal imbalances. Under such conditions, institutional risks are no longer considered exclusively as derivatives of external shocks and acquire the characteristics of a systemic factor embedded in the very logic of modern regulation. The study employs systemic, structural-functional, and institutional approaches, as well as methods of logical generalization and comparative analysis, which allowed us to consider institutional risks as a systemic result of the interaction between regulatory decisions, institutional constraints, and behavioral responses of economic agents. The scientific novelty of the research lies in the substantiation of institutional risks as an endogenous product of the gap between the dynamics of socio-economic changes and the adaptive capacity of regulatory institutions, as well as the disclosure of their dual role in the economic management system. As a result, it has been established that the complication of the regulatory environment in the absence of proper coordination of rules, procedures, and responsibilities of management entities contributes to the growth of internal inconsistency of regulation and a decrease in the predictability of management decisions. It has been proven that institutional constraints not only perform a stabilizing function, but also play a key role in structuring and redistributing risks between different levels of economic management, reducing the likelihood of their concentration and systemic amplification. It is concluded that enhancing the resilience of economic development in a complex regulatory environment requires the formation of a coherent institutional architecture focused on long-term priorities, predictable regulatory rules, and a clear division of accountability for management decisions. Under such conditions, institutional risks are transformed from a destabilizing factor into a tool for identifying structural constraints and improving the effectiveness of economic policy.