The Role of Institutional Mechanisms in Ensuring Economic Security and Directions for Their Improvement: The Case of Azerbaijan
Fizuli Kerimov
Abstract. The resilience of a national economy is measured not only by growth rates but also by institutional mechanisms that safeguard macroeconomic stability and social welfare. The concept of economic security encompasses the ability of the economic system to withstand internal and external threats, to maintain development in line with national interests and to protect domestic productive capacity. Since gaining independence Azerbaijan has recognised the risks of an energy‑dependent economy and has therefore oriented its long‑term policy toward expanding non‑oil sectors, coordinating fiscal and monetary policy, building strategic reserves and diversifying foreign trade. Under conditions of global volatility new challenges such as digital transformation, boosting innovation, ensuring cybersecurity and deepening international economic integration have become central. This paper examines the theoretical foundations of economic security and analyses the composition of institutional mechanisms in Azerbaijan’s practice, evaluates their efficiency and proposes directions for improvement. The analysis shows that the development of the economic security system is closely linked to raising social welfare, safeguarding macroeconomic stability, supporting innovation and the digital economy, reducing regional disparities and strengthening the legal and institutional framework.
Keywords: economic security, institutional mechanisms, sustainable development, digital transformation, fiscal policy, innovation, foreign trade