IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v19y2005i4p381-398.html
   My bibliography  Save this article

An Institutional Perspective to Finance and Development as an Alternative to Financial Liberalisation

Author

Listed:
  • Philip Arestis
  • Howard Stein

Abstract

This paper argues that financial liberalisation as practiced recently worldwide engenders widespread financial crises precisely because of the weak foundations of its theoretical framework and poor empirical performance. Financial liberalisation is critically evaluated on both theoretical and empirical grounds, which suggests that an alternative is vitally necessary. Based on institutional theory,a new approach is proposed the focus of which is on ways to affect financial and banking transformation that is more consistent with economic development. We demonstrate how this theoretical approach can be applied in the real world, and indeed how the theoretical propositions we put forward in this contribution, very different from those of financial liberalisation, produce a more developmentally oriented set of policies for the countries that are prepared to pursue them.

Suggested Citation

  • Philip Arestis & Howard Stein, 2005. "An Institutional Perspective to Finance and Development as an Alternative to Financial Liberalisation," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(4), pages 381-398.
    • Handle: RePEc:taf:irapec:v:19:y:2005:i:4:p:381-398
    DOI: 10.1080/02692170500208459
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/02692170500208459
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692170500208459?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nabli, Mustapha K. & Nugent, Jeffrey B., 1989. "The New Institutional Economics and its applicability to development," World Development, Elsevier, vol. 17(9), pages 1333-1347, September.
    2. R McKinnon, 1991. "Financial Control in the Transition to a Market Economy," CEP Discussion Papers dp0040, Centre for Economic Performance, LSE.
    3. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    4. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(1), pages 193-194, February.
    5. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(2), pages 541-545, April.
    6. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(4), pages 1007-1017, August.
    7. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(6), pages 1461-1465, December.
    8. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(5), pages 1273-1289, October.
    9. ,, 2002. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 18(3), pages 819-821, June.
    10. Beck, Thorsten & Levine, Ross, 2002. "Industry growth and capital allocation:*1: does having a market- or bank-based system matter?," Journal of Financial Economics, Elsevier, vol. 64(2), pages 147-180, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Doaa M. Salman & Eyad M. Atya, 2014. "What is the role of Financial Development and Energy Consumption on Economic Growth? New Evidence from North African Countries," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 3(1), pages 137-149, January.
    2. Dandume, Muhammad Yusuf & A.C., Dr.Malarvizhi, 2014. "Does Financial Liberalization, Spur Economic Growth and Poverty Reduction in Six Sub-Saharan African Countries; Panel Unit Root and Panel Vector Error Correction Tests," MPRA Paper 52349, University Library of Munich, Germany, revised Aug 2013.
    3. Amaira Bouzid, 2013. "Governance, Financial Liberalization And Economic Growth: Dynamic Panel Data Approach," Romanian Economic Business Review, Romanian-American University, vol. 8(2), pages 59-74, June.
    4. Shahbaz, Muhammad & Lean, Hooi Hooi, 2012. "Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia," Energy Policy, Elsevier, vol. 40(C), pages 473-479.
    5. Mekki Hamdaoui, 2017. "RETRACTED ARTICLE: Liberalization, Regulatory Delays and Vulnerability to Systemic Banking Crisis," International Economic Journal, Taylor & Francis Journals, vol. 31(4), pages 490-534, October.
    6. Thomas Gries & Manfred Kraft & Daniel Meierrieks, 2011. "Financial deepening, trade openness and economic growth in Latin America and the Caribbean," Applied Economics, Taylor & Francis Journals, vol. 43(30), pages 4729-4739.
    7. Konstantinos Loizos, 2018. "The Financial Repression†Liberalization Debate: Taking Stock, Looking For A Synthesis," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 440-468, April.
    8. Comlanvi Jude EGGOH, 2009. "Développement financier et croissance : Une synthèse des contributions pionnières," LEO Working Papers / DR LEO 442, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    9. Farzad Haider Alvi & Peter J. Williamson, 2023. "Responses to global financial standards in emerging markets: Regulatory neoliberalism and the Basel II Capital Accord," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2635-2650, July.
    10. Akinsola, Folusu A. & Odhiambo, Nicholas M., 2018. "Revisiting financial liberalisation and economic growth: A review of international literature," Working Papers 24794, University of South Africa, Department of Economics.
    11. Godspower-Akpomiemie, Euphemia & Ojah, Kalu, 2021. "Market discipline, regulation and banking effectiveness: Do measures matter?," Journal of Banking & Finance, Elsevier, vol. 133(C).
    12. Mekki Hamdaoui & Samir Maktouf, 2019. "Overall effects of financial liberalization: financial crisis versus economic growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 568-595, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sin-Yu Ho & N.M. Odhiambo, 2018. "Analysing the macroeconomic drivers of stock market development in the Philippines," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1451265-145, January.
    2. Claudia García-García & Catalina B. García-García & Román Salmerón, 2021. "Confronting collinearity in environmental regression models: evidence from world data," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 30(3), pages 895-926, September.
    3. Cambier, Adrien & Chardy, Matthieu & Figueiredo, Rosa & Ouorou, Adam & Poss, Michael, 2022. "Optimizing subscriber migrations for a telecommunication operator in uncertain context," European Journal of Operational Research, Elsevier, vol. 298(1), pages 308-321.
    4. Libura, Marek, 2007. "On the adjustment problem for linear programs," European Journal of Operational Research, Elsevier, vol. 183(1), pages 125-134, November.
    5. Christophe Loussouarn & Carine Franc & Yann Videau & Julien Mousquès, 2021. "Can General Practitioners Be More Productive? The Impact of Teamwork and Cooperation with Nurses on GP Activities," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 680-698, March.
    6. Tschakert, Petra, 2016. "Shifting Discourses of Vilification and the Taming of Unruly Mining Landscapes in Ghana," World Development, Elsevier, vol. 86(C), pages 123-132.
    7. María-Consuelo Casabán & Rafael Company & Lucas Jódar, 2020. "Non-Gaussian Quadrature Integral Transform Solution of Parabolic Models with a Finite Degree of Randomness," Mathematics, MDPI, vol. 8(7), pages 1-16, July.
    8. Isabelle Boutron & Peter John & David J. Torgerson, 2010. "Reporting Methodological Items in Randomized Experiments in Political Science," The ANNALS of the American Academy of Political and Social Science, , vol. 628(1), pages 112-131, March.
    9. Ben Slimane, Faten & Padilla Angulo, Laura, 2019. "Strategic change and corporate governance: Evidence from the stock exchange industry," Journal of Business Research, Elsevier, vol. 103(C), pages 206-218.
    10. Bossert, Walter & Derks, Jean & Peters, Hans, 2005. "Efficiency in uncertain cooperative games," Mathematical Social Sciences, Elsevier, vol. 50(1), pages 12-23, July.
    11. Weijun Xie & Yanfeng Ouyang & Sze Chun Wong, 2016. "Reliable Location-Routing Design Under Probabilistic Facility Disruptions," Transportation Science, INFORMS, vol. 50(3), pages 1128-1138, August.
    12. Natalia Nikolaevna Natocheeva* & Yuri Alexandrovich Rovensky & Yuri Yuryevich Rusanov & Tatiana Viktorovna Belyanchikova & Anna Anatolevna Staurskaya, 2018. "Optimizing Variability of Approaches to Regulatory Financing of Higher Education Services," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 221-227:3.
    13. Sahar Validi & Arijit Bhattacharya & P. J. Byrne, 2020. "Sustainable distribution system design: a two-phase DoE-guided meta-heuristic solution approach for a three-echelon bi-objective AHP-integrated location-routing model," Annals of Operations Research, Springer, vol. 290(1), pages 191-222, July.
    14. Cabada, Alberto & Fernández-Gómez, Carlos, 2015. "Constant sign solutions of two-point fourth order problems," Applied Mathematics and Computation, Elsevier, vol. 263(C), pages 122-133.
    15. Andy Hall, 2005. "Capacity development for agricultural biotechnology in developing countries: an innovation systems view of what it is and how to develop it," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(5), pages 611-630.
    16. Athinoula A. Kosti & Simon Colreavy-Donnelly & Fabio Caraffini & Zacharias A. Anastassi, 2020. "Efficient Computation of the Nonlinear Schrödinger Equation with Time-Dependent Coefficients," Mathematics, MDPI, vol. 8(3), pages 1-12, March.
    17. Bruno Frey, 2005. "Problems with Publishing: Existing State and Solutions," European Journal of Law and Economics, Springer, vol. 19(2), pages 173-190, April.
    18. Lan, Heng-you, 2021. "Approximation-solvability of population biology systems based on p-Laplacian elliptic inequalities with demicontinuous strongly pseudo-contractive operators," Chaos, Solitons & Fractals, Elsevier, vol. 150(C).
    19. D. F. M. Torres & G. Leitmann, 2008. "Contrasting Two Transformation-based Methods for Obtaining Absolute Extrema," Journal of Optimization Theory and Applications, Springer, vol. 137(1), pages 53-59, April.
    20. Giorgio Fabbri & Fausto Gozzi & Andrzej Swiech, 2017. "Stochastic Optimal Control in Infinite Dimensions - Dynamic Programming and HJB Equations," Post-Print hal-01505767, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:19:y:2005:i:4:p:381-398. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.