institutions and organizations that should underpin the process in nigeria. but institutions and organizations interact in powerful ways : • the continuous interaction of institutions and organizations in the economic setting of scarcity and hence competition is the key to institutional change ; • competition forces organizations to continually invest in skills and knowledge to survive. the kinds of skills and knowledge individuals and their organizations acquire will shape evolving perceptions about opportunities and hence choices that will incrementally alter institutions. • the institutional framework dictates the kinds of skills and knowledge perceived to have the maximum pay - off. • perceptions are derived from the mental constructs of the players. • the economies of scope, complementarities, and network externalities of an institutional matrix make institutional change overwhelmingly incremental and path dependent. given the interactive nature of both institutions and organizations, we focus more narrowly in this lecture on institutions - as formal rules, legal infrastructure, informal constraints, and enforcement mechanisms that constrain or shape behaviour in the process of market - based economic transformation. such institutions help to transmit information to economic agents, enforce property rights and contracts, manage competition in all markets and shape the allocative efficiency of the state. a market economy framework requires a different legal - institutional system than a non - market economy. from a legal - institutional perspective, the supreme institution of a country is the constitution, which is supplemented by the other enactments of the legislature and pronouncements of the courts. the constitution among other things spells out the allocative powers in terms of who allocates economic resources in a society - the state or the market. it should also spell out the economic relations embodied in property rights and rule of law. as the supreme institution, the constitution in many cases prescribes the procedural aspects in terms of how law is promulgated and enforced and includes the functioning of the necessary legal and administrative institutions. the content and context of these institutional provisions and their enforcement make a fundamental difference in the speed and character of transformation of an economy. the system evolved by the framers of the american constitution based upon ‘ rule of law rather than rule of men ’ and unlocking human potentials by fashioning a society based on individual freedoms, competition, and private enterprise helped to unleash the progress of that society. on the contrary, the system of maximum controls by men over others as practiced in the communist countries showed in an experimental manner what the outcomes could be depending on the different systems of laws. with the experiments under communism

028 million ( one billion ) of usd or 13. 5 percent of gdp. this is twice as high as revenues from export of goods, which makes “ work force ” our main country export. furthermore, remittances are estimated to be three times higher than foreign direct investments ( fdi ) inflow and its value exceeds by far official aid from abroad. during the first stage of transition in albania policies for optimising the administration and utilisation of workers ’ remittances for developing purposes have been completely lacking. a few sporadic measures have aimed at driving workers ’ remittances into official channels and improving savings and investments incentives of emigrants in the country but have been by and large inadequate. more recently, we have taken a more attentive approach toward remittances and their potential contributions in financing the growth and development of the country. more specifically we are working in three main areas improvement of statistic ( 2 ) brining workers remittances into formal channels ( 3 ) directing workers remittances toward country ’ s development needs. there has been a boom in other areas of economy like real estate and commercial loans. credit to the economy grew by 60 - 70 percent on annual terms. on gdp terms, credit to the economy has grown by 3 percentage points during 2005, approaching the level of 11 percent of gdp. it has been the main source of the monetary expansion during this period has been the increase in the volume of lending to the economy, which is a shift from government borrowing and from foreign assets. foreign - currency loans continue to be preferred due to lower interest rates, hence accounting for nearly 75 percent of total loans at end - july. the rapid credit growth has so far had no effect on overall credit quality. the ratio of non - performing loans fell to 3. 5 percent of total loans in march, down from 4. 2 percent in december last year. nowadays foreign banks in albania hold around 95 % of the total assets. most of the assets is owned by banks coming from the european union area. this ample participation of foreign banks has certainly had positive implication on both banks ’ governance and the quality of services. this latter has improved considerably in the recent years with the privatisation of the ex - savings bank, still the biggest bank in the country. as a result, we have experienced an increase in the banking network throughout the country ’ s territory, a gradual restructuring of the banking system balance sheet including a quick increase in