Accounting & Marketing

Methodological approach to conduct the analysis which examines the significance of institutional changes in resolving socioeconomic development issues. This condition is most severe in nations with subpar institutions, which highlights the significance of determining the conditions and factors that influence this quality. One of these factors may be cultural norms.

This study aims to demonstrate the hypothesis that institutional changes and cultural characteristics are interdependent and have an impact on economic and financial development trajectories. Utilizing comparative historical analysis techniques, including economic processes, is necessary to accomplish this objective. Cultural characteristics have influenced and continue to influence the nature of economic decisions, accelerating or stifling financial development and economic growth, according to historical analysis. These characteristics correspond to a particular quality of institutions. Because they are inertial in nature, reform impulses can change these characteristics, laying the groundwork for new and productive institutions in the future.

Non-economic factors that influence macroeconomic dynamics and the development of financial markets include the quality of institutions. Objective factors that accompany the historical process largely shape this quality. As a result, the focus of this study is on the factors that drive this process and how they impact the quality of institutions. It is demonstrated that culture, when viewed in its broadest sense, encompasses not only relevant heritage accumulated at various stages of the historical process but also socially prevalent behavioural attitudes and value beliefs that influence decision-making. Culture is the primary such force or source of institutional change. Through the use of specific historical events, the thesis about the significance of culture as a factor in sustainable economic dynamics and a source of the formation of the quality of national institutions is supported. Economic policy goals of financial development are frequently prioritized over institutional constraints when this conditionality is underestimated. Emerging market economies are primarily characterized by this factor in macroeconomic decision-making. In addition, studies conducted over the past few decades have shown that high-quality institutions have a positive and significant impact on macroeconomic dynamics. Because of this, the article is able to evaluate the quality of institutions and the role that finance plays in the set of state economic policy priorities in a different way.