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The consideration of institutional economics principles in the management process seems to be the condition of socio-economic development of a country/city in long time perspective. Since last 25 years in Poland it can observed the process of adopting the new institutional system. The system is composed of institutions, norms, principles and regulations influencing the market, social assistance or insurance system, providing public goods, external effects, information as well as affecting behaviour of individuals and entities. The aim of the paper is to present the assumptions of institutional economics in terms of relations between the institutional system and city development. The paper focuses on social, relation and culture determinants prejudging the differences in functioning of enterprises, countries, regions/cities and claims that economy is strongly dependent on institutional system.
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