Document Type : Research Article
Authors
1 Doctor of Economics,Professor,Chair of Mathematics Methods in Economicsat the Faculty of Economics and Management, Yerevan State University, Republic of Armenia
2 Laboratory Assistant at the Faculty of Economics and Management, Yerevan State University, Armenia
Abstract
Human behaviour and institutions are two closely linked concepts. Historically,
institutions have been created as a mechanism for limiting human behaviour that exists in a
particular social environment. At the same time, the established institutions form certain
stereotypes of behaviour or so-called accepted norms of behaviour themselves. One of the
most important prerequisites for the successful development of society is the harmonisation of
formal institutions and accepted norms of behaviour. Inconsistency of formal institutions with
accepted norms of behaviour leads to an increase in transactional costs of institutions'
functioning, which has a negative impact both on development prospects and on the welfare
of countries.In the present article the mechanisms of institutional influence on the accepted
norms of behaviour and on the welfare of countries are discussed. The data on traffic
accidents are used, which provide information on both the development of institutions and the
overall behavioural conditions in different countries. The structural equation model has been
applied to a sample of 50 countries and it has been shown that, along with formal institutions,
behavioural prerequisites also have a significant impact on countries' welfare. Institutions
influence the welfare of countries not only directly, but also through their influence on
existing norms of behaviour. At the same time, the model of structural equations with latent
variables makes it possible to assess the level of institutions' impact on the welfare of
countries through the influence of behavioural prerequisites.
Keywords
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