We thank Allan Drazen, Nicola Fuchs-Schündeln, Nicola Gennaioli, Elias Papaioannou, Thierry Verdier, Carlos Winograd, three anonymous referees and seminar participants at the Economic Policy Panel in Warsaw (November 2011), 15th World Congress of the International Economic Association (Istanbul), Development Workshop in Clermont Ferrand, Development and Globalization Seminar at University of Paris 1-Sorbonne, Université Paris 2, CEPR-Fondazione Debenedetti Conference ‘Reforms without Prejudice’ (Milan) and Paris School of Economics-IMF Conference ‘Political Economy of Crisis-Induced Reforms’. We also thank Zorobabel Bicaba and Lenka Gregorova for the excellent research assistance. The data and appendixes for this paper (theoretical model and additional econometric results) are available at http://www.naurocampos.net/papers/reversals.html. We are responsible for all remaining errors.The Managing Editor in charge of this paper was Tullio Jappelli.
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Financial liberalization and reversals: political and economic determinants
Article first published online: 2 JUL 2012
DOI: 10.1111/j.1468-0327.2012.00288.x
© CEPR, CES, MSH, 2012
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How to Cite
Campos, N. F. and Coricelli, F. (2012), Financial liberalization and reversals: political and economic determinants. Economic Policy, 27: 483–513. doi: 10.1111/j.1468-0327.2012.00288.x
Publication History
- Issue published online: 2 JUL 2012
- Article first published online: 2 JUL 2012
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Summary
What accounts for the dynamics of financial reforms? This paper identifies the political regime as one of the main factors. Focusing on democratization and financial reform, it puts forward novel evidence for a U-shaped relation, across countries and over time, for different reform measures and a wide range of estimators. Partial democracy is a main obstacle to financial reforms and democratization, when incomplete, may lead to severe financial reform reversals.
—Nauro F. Campos and Fabrizio Coricelli