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Financial Development, Institutional Quality and Poverty Reduction: Worldwide Evidence

Author

Listed:
  • Nasreddine Kaidi

    (University of Manouba
    ECSTRA Laboratory)

  • Sami Mensi

    (University of Manouba
    ECSTRA Laboratory)

  • Mehdi Ben Amor

    (ECSTRA Laboratory
    University of Carthage
    IEI Linköping University)

Abstract

This paper tests the relationship between financial development, quality of institutions and poverty. To this end, we reviewed the literature and selected indicators of poverty, financial development and quality of institutions. Empirically, we used the three-stage least squares method to examine a sample of 132 countries observed over the 1980–2014 period. First, we proved that financial development does not improve the situation of the poor, while the effect of institution quality on poverty and financial development depends on the choice of indicators. Our robustness analysis pointed to the sensitivity of our results to the different financial development, quality of institutions and poverty indicators.

Suggested Citation

  • Nasreddine Kaidi & Sami Mensi & Mehdi Ben Amor, 2019. "Financial Development, Institutional Quality and Poverty Reduction: Worldwide Evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 131-156, January.
    • Handle: RePEc:spr:soinre:v:141:y:2019:i:1:d:10.1007_s11205-018-1836-0
    DOI: 10.1007/s11205-018-1836-0
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    More about this item

    Keywords

    Financial development; Quality of institutions; Poverty; 3SLS; Simultaneous equation modeling;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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