نهادهای سیاسی و توسعه مالی: یک مطالعه تجربی

This paper examines whether political institutional improvement promotes financial development, using a panel dataset of 90 developed and developing countries over 1960–99. The empirical evidence reveals a positive effect of institutional improvement on financial development at least in the short-run, particularly for lower income countries. The preliminary evidence by a before–after event study indicates that a democratic transformation is typically followed by an increase in financial development.

Over the last few decades, there has been a substantial increase in financial development in many developing countries. The average ratio of private credit to GDP increased from 23% in 1980 to 32% in 2000, while the average ratio of liquid liabilities to GDP rose from 32% in 1980 to 42% in 2000 in developing world. On the political front, during 1980–2000 there were 62 developing countries undertaking significant institutional reforms toward democracies.1 Do the above economic and political events in the developing world interact in important ways? Much work has been done to explore the relationship between institutional improvement, especially political liberalization, and economic growth. The existing research in this field does not unanimously establish the consequences of political reform for economic development. Instead, it is made up of one line of research supporting positive consequences, another line stressing negative consequences and some maintaining ambiguous views. How does democratic process to improve institutional quality influence financial development, especially in countries with low GDP per capita, high ethnic and religious divisions, or specific legal origins?

This research examines whether institutional improvement stimulates financial development using a panel of 90 economies over the period 1960–99. By comparing newly developed panel data techniques, including bias-corrected LSDV and system GMM estimators, this paper shows that improved institutional quality is associated with increases in financial development at least in the short run, and this is particularly true for lower income countries, ethnically divided and French legal origin countries. For the lower income countries, this effect is expected to persist over longer horizons. The preliminary evidence by a “before-and-after” approach indicates that in general democratic transitions are typically preceded by low financial development, but followed by a short-run boost in financial development and greater volatility of financial development.