This dissertation aims to shed a light on the differing theories of key concepts of institutions, and money in social science with an application of the Mongolian institutional reform to prove the importance of the government in endorsing monetary systems. Institutions deriving from formal and informal origins, when habituated by a collective, shape the way we communicate and connect. Money is an institution that is used to accommodate trade and exchange of goods and services to fulfil the needs of individuals. It carries an abstract value mediating the valuation of labour and assets in monetary terms, and with the implementation of monetary policies and sanctions, it motivates productivity and accumulation. The government is a special type of institution which binds the mass towards a collectively accepted objective through a regulated system of conduct. Hence, it plays a vital role in implementing regulatory practices and interventions to endorse an effective monetary system and restrain opportunistic behaviour.