Finance, regulation and inclusive growth
Abstract:Regulatory agencies that foster competition among private financial institutions, promote transparency throughout the financial system and work relentlessly to reform policies that perversely distort the incentives of private institutions encourage inclusive growth. In contrast, regulations that stymie competition in the name of stability and policies that funnel credit to politically‐favoured ends in the name of the poor typically curtail inclusive growth. Political economy factors are paramount in shaping the design and implementation of financial regulatory policies since powerful segments of society may seek exclusive ‐ not inclusive ‐ growth.
Document Type: Review Article
Publication date: April 1, 2012