Politics and the Determinants of Banking Crises: the Effects of Political Checks and Balances
A large body of research has provided significant insights into the financial and macroeconomic causes of banking crises. Many of these causes - ranging from lapses in financial regulation to determined efforts to maintain a fixed exchange rate - have in common their origins as policy decisions of political actors. Numerous non-technical criteria, ranging from the identity and interests of political constituencies to political and electoral institutions, condition the incentives of political decision makers to make or correct policy "mistakes". This paper explores the role of one significant political institution, the presence or absence of political checks and balances. Checks and balances influence the independence of regulators, the value and cost of special interest payoffs to policy makers, and individual political incentives to avoid collective policy failures. The evidence suggests that the financial and economic causes of crisis, consistent with these arguments, differ significantly in countries that exhibit few or many political checks and balances.
|Date of creation:||Nov 2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (562) 670 2000
Fax: (562) 698 4847
Web page: http://www.bcentral.cl/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nouriel Roubini & Jeffrey Sachs, 1989. "Government Spending and Budget Deficits in the Industrial Economies," NBER Working Papers 2919, National Bureau of Economic Research, Inc.
- Alesina, A. & Drazen, A., 1991.
"Why Are Stabilizations Delayed?,"
6-91, Tel Aviv - the Sackler Institute of Economic Studies.
- George A. Akerlof & Paul M. Romer, 1993. "Looting: The Economic Underworld of Bankruptcy for Profit," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 1-74.
- Alberto Alesina & Geoffrey Carliner, 1991. "Politics and Economics in the Eighties," NBER Books, National Bureau of Economic Research, Inc, number ales91-1, June.
- Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
When requesting a correction, please mention this item's handle: RePEc:chb:bcchwp:119. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sepulveda)
If references are entirely missing, you can add them using this form.