IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpif/0209001.html
   My bibliography  Save this paper

Finance, law and growth during transition: a survey

Author

Listed:
  • Ralph de Haas

    (De Nederlandsche Bank)

Abstract

This paper surveys the economic literature on the links between finance, law and growth in the Central and Eastern European transition countries. The literature that is surveyed at the outset of the paper shows that if a financial system is based on an adequate legal system it can positively contribute to economic growth. However, the financial system in CEE appears to have been restrained in making such a contribution. The theoretical and empirical results discussed further on in the paper partly ex-plain this by showing that privatising is in itself not enough to improve the functioning of the local banking systems. An adequate legal and institutional environment proves to be a necessary condition as well. The insufficient quality of institutions has manifested itself in the continuation of soft budget constraints for (formerly) state- owned enterprises combined with credit rationing of small and medium sized private enterprises. During the last years, formal institutions have been upgraded remarkably fast in some countries. In principle, this has improved the operating environment of many financial institutions. However, such “paper” improvements turn out to have only a limited effect as long as the en-forcement of the new laws and the rejection of corrupt practises have not yet reached the level of an average market economy.

Suggested Citation

  • Ralph de Haas, 2002. "Finance, law and growth during transition: a survey," International Finance 0209001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpif:0209001
    Note: Type of Document - Acrobat PDF; prepared on PC; to print on HP; pages: 27; figures: None. Published as DNB Staff Reports 2002, nr. 74. For the complete series, please visit www.dnb.nl
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0209/0209001.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Hanneke Bol & Jakob de Haan & Bert Scholtens & Ralph de Haas, 2002. "How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis," International Finance 0209005, University Library of Munich, Germany.
    2. Sándor Gardó, 2010. "Bank Governance and Financial Stability in CESEE: A Review of the Literature," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 6-31.

    More about this item

    Keywords

    Financial development; economic growth; legal institutions; growth;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:wpa:wuwpif:0209001. 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: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.