Abstract. This paper explores how institutional quality influences economic development across EU Member States. Using 2022 data from Eurostat and the World Bank, we analyzed the relationship between institutional indicators (such as voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, control of corruption) and GDP per capita expressed in purchasing power standard (PPS). In this respect, we examined the correlation coefficients, which confirmed a strong link between institutions and economic performance. Northern European Union countries show both institutional strength and prosperity, while many Eastern and Southern European nations face weaker institutions and lower development. This study also assesses the institutional progress within the EU from 2013 to 2022.

Keywords: institutions, economic development, correlation coefficients, GDP per capita, institutional quality.