The politics of financial development: The role of interest groups and government capabilities

Abstract

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Tribalism and Financial Development

“…To this end, many angles have been explored over the past decades, notably: the role of the State (Rajan & Zingales, 2003;Ang, 2013a;Becerra et al, 2012); law and finance theory (La Porta et al, 1997, 1998Beck et al, 2003); power and information credit-oriented theories (Aghion & Bolton, 1992;Djankow et al, 2007;Stiglitz & Weiss, 1981); endowment theory (Beck et al, 2003); culture (Stulz & Williamson, 2003); genetic distance (Ang & Kumar, 2014); social capital (Guiso et al, 2004), macro-finance (Rajan & Zingales, 1998;Baltagi et al, 2009) and human capital (Kodila-Tedika & Asongu, 2015).…”

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

“…The bureaucratic quality index takes values from 0 to 6, where 6 represents that the country has a strong and expert bureaucracy. Becerra, Cavallo and Scartascini (2012) show the relevance of this variable for enabling reforms that foster credit development using a logic very similar to the one we follow here. Note that we rescale this variable to run 0-1 in the empirical section.…”

State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government

“…In this context, higher government capacities play an important role as they can provide deeper financial markets: Becerra, Cavallo and Scartascini (2012) show that financial development is higher in countries with enhanced government capabilities as, among other channels, they tend to abuse less the financial system in order to finance government operations.…”

“…ICRG's "bureaucratic quality" has been used to measure state capacity in articles particularly interested in administrative features of the state (Cingolani, Thomsson and de Crombrugghe, 2013;Van de Walle, 2005;Hanson and Sigman 2013), and in studies such as this one that attempt to capture how government capabilities affect the supply or demand of certain types of policies (see for example Becerra, Cavallo and Scartascini, 2012). This indicator of bureaucratic quality also correlates well with other dimensions of state capabilities that have been shown to relate to higher quality of policymaking in smaller country samples (within Latin America); see, for instance, Scartascini and Tommasi (2010), Scartascini, Stein, and Tommasi (2013), and Franco Chuaire and Scartascini (2014).…”