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Financial Liberalization, Elite Heterogeneity and Political Reform

Author

Listed:
  • Nauro Campos

    (Brunel University London [Uxbridge], CEPR - Center for Economic Policy Research, IZA - IZA)

  • Fabrizio Coricelli

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research)

Abstract
What accounts for the dynamics of financial reforms? This paper identifies the political regime as main factor. Focusing on democratization and financial reform, it puts forward novel evidence for a U-shaped relation, across countries, over time as well as in a panel setting 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. We also show that, even when de jure set off de facto financial liberalization, the political regime still play a fundamental role in the reform's implementation phase.

Suggested Citation

  • Nauro Campos & Fabrizio Coricelli, 2010. "Financial Liberalization, Elite Heterogeneity and Political Reform," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00967428, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00967428
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00967428
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    References listed on IDEAS

    as
    1. Giavazzi, Francesco & Tabellini, Guido, 2005. "Economic and political liberalizations," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1297-1330, October.
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