American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Financial Reform: What Shakes It? What Shapes It?
American Economic Review
vol. 95,
no. 1, March 2005
(pp. 66–88)
Abstract
What accounts for the worldwide advance of financial reforms in the last quarter century? Using a new index of financial liberalization, we find that influential events shook the policy status quo. Balance-of-payments crises spurred reforms, but banking crises set liberalization back. Falling global interest rates strengthened reformers, while new governments went both ways. The overall trend toward liberalization, however, reflected pressures and incentives generated by initial reforms that raised the likelihood of additional reforms, stimulated further by the need to catch up with regional reform leaders. In contrast, ideology and country structure had limited influence.Citation
Abiad, Abdul, and Ashoka Mody. 2005. "Financial Reform: What Shakes It? What Shapes It?" American Economic Review, 95 (1): 66–88. DOI: 10.1257/0002828053828699Additional Materials
JEL Classification
- F34 International Lending and Debt Problems
- G28 Financial Institutions and Services: Government Policy and Regulation
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- P16 Capitalist Systems: Political Economy
- P26 Socialist Systems and Transitional Economies: Political Economy; Property Rights
- P34 Socialist Institutions and Their Transitions: Financial Economics