Institutional Quality of the Financial System in the Middle East and North Africa Countries

The aim of this study is to provide explanations for the institutional development and quality level of the financial system that supply the necessary resources for capital accumulation and to spread new technologies among economic actors in the Middle East and North Africa region. These are at the center of power struggles and proxy wars because they have a large proportion of global natural resource reserves. With this study, it is understood that the political instability in the region leading to the possibility of social conflict and the existence of a negative investment framework for property rights has created a fragmented institutional structure with significant limitations on the development of the financial system in the countries of the region. This situation causes the lack of economic diversity to encourage a sustainable economic structure, the private sector does not develop at the sufficient level, and political participation remains limited and thus the overall economic performance of the region remains low. In these countries where there is insufficient depth in financial markets, it is necessary to establish an institutional structure that will protect economic actors from risk, secure economic freedoms and thus lead to the converting of savings into investments. If these regulations are implemented, economic diversity can be increased and the overall economic performance of the countries in the region can be improved.