Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development
The existing literature emphasizes and contrasts the role of political checks and balances and legal origin in determining the pace of financial sector development. This paper expands substantially on one aspect of this debate: the fact that govern...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/03/7419560/beyond-legal-origin-checks-balances-political-credibility-citizen-information-financial-sector-development http://hdl.handle.net/10986/7204 |
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okr-10986-72042021-04-23T14:02:33Z Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development Keefer, Philip BALANCE SHEETS BUREAUCRATIC QUALITY CHECKS AND BALANCES CIVIL LAW COMMON LAW COMPETITIVENESS CORRUPTION CREDIBILITY OF GOVERNMENT COMMITMENTS CREDIBILITY OF GOVERNMENTS DEMOCRACY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMY LITERATURE EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL WORK ENDOGENOUS VARIABLE EXECUTIVE DIRECTORS EXPROPRIATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LEGISLATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL TRANSACTIONS GDP GOVERNMENT ACTIONS GOVERNMENT COALITION GOVERNMENT POLICY GROWTH EQUATIONS GROWTH LITERATURE INCUMBENT INSTITUTIONAL VARIABLES INSURANCE INSURANCE COMPANIES INTEREST GROUP INTEREST RATES LEGAL SYSTEM LEGAL SYSTEMS MONETARY POLICY NATIONAL DEFENSE PER CAPITA INCOME POLICY MAKING POLICY RESEARCH POLITICAL COMPETITION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL OUTCOMES POLITICAL RISK PRIVATE PROPERTY PRIVATE PROPERTY RIGHTS PRIVATE SECTOR PROPERTY RIGHTS PROTECTION OF PRIVATE PUBLIC GOOD PUBLIC GOOD PROVISION PUBLIC GOODS PUBLIC INVESTMENT REGULATORY DECISIONS RULE OF LAW SECURE PROPERTY RIGHTS SIGNIFICANT IMPACT SOCIAL COSTS SOCIAL INFRASTRUCTURE VETO VOTERS VOTING The existing literature emphasizes and contrasts the role of political checks and balances and legal origin in determining the pace of financial sector development. This paper expands substantially on one aspect of this debate: the fact that government actions that promote financial sector development, whether prudent financial regulation or secure property and contract rights, are public goods and sensitive to political incentives to provide public goods. Tests of hypotheses emanating from this argument yield four new conclusions. First, two key determinants of those incentives-the credibility of pre-electoral political promises and citizen information about politician decisions-systematically promote financial sector development. Second, these political factors, along with political checks and balances, operate in part through their influence on the security of property rights, an argument asserted but not previously tested. Third, contrary to findings elsewhere in the literature, the political determinants of financial sector development are significant even in the presence of controls for legal origin. Finally, and again in contrast to the literature, the evidence here suggests that legal origin primarily proxies for political phenomena. Legal origin is a largely insignificant determinant of financial sector development when those phenomena are fully taken into account. 2012-06-05T21:50:42Z 2012-06-05T21:50:42Z 2007-03 http://documents.worldbank.org/curated/en/2007/03/7419560/beyond-legal-origin-checks-balances-political-credibility-citizen-information-financial-sector-development http://hdl.handle.net/10986/7204 English Policy Research Working Paper; No. 4154 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
BALANCE SHEETS BUREAUCRATIC QUALITY CHECKS AND BALANCES CIVIL LAW COMMON LAW COMPETITIVENESS CORRUPTION CREDIBILITY OF GOVERNMENT COMMITMENTS CREDIBILITY OF GOVERNMENTS DEMOCRACY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMY LITERATURE EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL WORK ENDOGENOUS VARIABLE EXECUTIVE DIRECTORS EXPROPRIATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LEGISLATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL TRANSACTIONS GDP GOVERNMENT ACTIONS GOVERNMENT COALITION GOVERNMENT POLICY GROWTH EQUATIONS GROWTH LITERATURE INCUMBENT INSTITUTIONAL VARIABLES INSURANCE INSURANCE COMPANIES INTEREST GROUP INTEREST RATES LEGAL SYSTEM LEGAL SYSTEMS MONETARY POLICY NATIONAL DEFENSE PER CAPITA INCOME POLICY MAKING POLICY RESEARCH POLITICAL COMPETITION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL OUTCOMES POLITICAL RISK PRIVATE PROPERTY PRIVATE PROPERTY RIGHTS PRIVATE SECTOR PROPERTY RIGHTS PROTECTION OF PRIVATE PUBLIC GOOD PUBLIC GOOD PROVISION PUBLIC GOODS PUBLIC INVESTMENT REGULATORY DECISIONS RULE OF LAW SECURE PROPERTY RIGHTS SIGNIFICANT IMPACT SOCIAL COSTS SOCIAL INFRASTRUCTURE VETO VOTERS VOTING |
| spellingShingle |
BALANCE SHEETS BUREAUCRATIC QUALITY CHECKS AND BALANCES CIVIL LAW COMMON LAW COMPETITIVENESS CORRUPTION CREDIBILITY OF GOVERNMENT COMMITMENTS CREDIBILITY OF GOVERNMENTS DEMOCRACY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMY LITERATURE EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL WORK ENDOGENOUS VARIABLE EXECUTIVE DIRECTORS EXPROPRIATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LEGISLATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL TRANSACTIONS GDP GOVERNMENT ACTIONS GOVERNMENT COALITION GOVERNMENT POLICY GROWTH EQUATIONS GROWTH LITERATURE INCUMBENT INSTITUTIONAL VARIABLES INSURANCE INSURANCE COMPANIES INTEREST GROUP INTEREST RATES LEGAL SYSTEM LEGAL SYSTEMS MONETARY POLICY NATIONAL DEFENSE PER CAPITA INCOME POLICY MAKING POLICY RESEARCH POLITICAL COMPETITION POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL OUTCOMES POLITICAL RISK PRIVATE PROPERTY PRIVATE PROPERTY RIGHTS PRIVATE SECTOR PROPERTY RIGHTS PROTECTION OF PRIVATE PUBLIC GOOD PUBLIC GOOD PROVISION PUBLIC GOODS PUBLIC INVESTMENT REGULATORY DECISIONS RULE OF LAW SECURE PROPERTY RIGHTS SIGNIFICANT IMPACT SOCIAL COSTS SOCIAL INFRASTRUCTURE VETO VOTERS VOTING Keefer, Philip Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| relation |
Policy Research Working Paper; No. 4154 |
| description |
The existing literature emphasizes and
contrasts the role of political checks and balances and
legal origin in determining the pace of financial sector
development. This paper expands substantially on one aspect
of this debate: the fact that government actions that
promote financial sector development, whether prudent
financial regulation or secure property and contract rights,
are public goods and sensitive to political incentives to
provide public goods. Tests of hypotheses emanating from
this argument yield four new conclusions. First, two key
determinants of those incentives-the credibility of
pre-electoral political promises and citizen information
about politician decisions-systematically promote financial
sector development. Second, these political factors, along
with political checks and balances, operate in part through
their influence on the security of property rights, an
argument asserted but not previously tested. Third, contrary
to findings elsewhere in the literature, the political
determinants of financial sector development are significant
even in the presence of controls for legal origin. Finally,
and again in contrast to the literature, the evidence here
suggests that legal origin primarily proxies for political
phenomena. Legal origin is a largely insignificant
determinant of financial sector development when those
phenomena are fully taken into account. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Keefer, Philip |
| author_facet |
Keefer, Philip |
| author_sort |
Keefer, Philip |
| title |
Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| title_short |
Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| title_full |
Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| title_fullStr |
Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| title_full_unstemmed |
Beyond Legal Origin and Checks and Balances : Political Credibility, Citizen Information, and Financial Sector Development |
| title_sort |
beyond legal origin and checks and balances : political credibility, citizen information, and financial sector development |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/03/7419560/beyond-legal-origin-checks-balances-political-credibility-citizen-information-financial-sector-development http://hdl.handle.net/10986/7204 |
| _version_ |
1764401624685477888 |