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The paper deals with a neglected idea of relationships and their meaning for the outcome of economic system. With reference to the institutional theory it looks at relationships as representation of values that drive economy and that bring socially and economically accepted outcomes. In the globalized world of increasing significance of communications and mobility on the one hand, and decreasing barriers to the exchange of ideas and goods on the other, the significance of the quality of human relationships has become critical. The aim of the paper is to present the idea that relationships inherently affect economic outcomes, and hence can be considered a powerful economic institution. Yet, these are not relationships but the values they come to represent which determine the behavior of economic agents, thus the outcome of economy. Values fostering relationship are long-term institutions which are critical to stability of the economic system: they can improve efficiency and allocation of resources and bring more socially accepted outcomes. However, a change in values imposes a shift in relationships and in turn it affects economic institutions: adoption of values which are not inherently embedded by society is likely to bring about destabilization of the economic and social systems. In this context, not only does the paper show significance of relationships and their meaning for the outcome of economy but it also demonstrates that institutions can be viewed as relationships themselves. The significance of the value-based (cultural) factors of economic development gained recognition in the late 20^th century; however, for the predominant part of the last century the history of economics was largely devoid of any regard for human values and relationships and principally concentrated on the ways and means of profit maximization. The overwhelming trend occurred contrary to the social origin of the science. The paper goes back to Adam Smith (Wealth of Nations v. The Theory of Moral Sentiments) who drew attention to the unlike attitudes which people demonstrate in personal and market situations. One of the most significant emphases on the value of relationships for economic development was made by Karl Polanyi in his theory of social embeddedness of economic systems. Today values and relationship are regaining recognition, particularly in view of the inability of the economic mainstream theories and economists to provide for effective safeguards against economic downturn which are primarily rooted in the decline of human relationships and values.

Institutions; Relationships; Values; Development; Crisis