||This thesis focuses on the quality of the institutional framework of the Czech Republic and compares it with other new EU Member States. It appears that some key factors like the role of institutions, enforcement of legal rules were underestimated during the process of economic and social transition. As a consequence, the economy was influenced by strong interest groups. We are trying to confirm though the analysis of the business environment that performance lags behind due to influence of mentioned groups. Using some simple regression models we show that delay of some vital reforms creates large space for activities like rent-seeking.