Financial Liberalization in Developing Countries (eBook)

Issues, Time Series Analyses and Policy Implications

Abdullahi Dahir Ahmed, Sardar M. N. Islam (Autoren)

eBook Download: PDF

2009 | 2009
XVIII, 298 Seiten
Physica (Verlag)
978-3-7908-2168-0 (ISBN)

Infos

The recent global ?nancial crisis has made ?nancial liberalization a topic of great academic and practical interest. This book makes new contributions to the topic by combining fact-?nding, empirical analysis, and theory to examine the relationship between ?nancial liberalization and economic growth. Among its contributions, the book provides detailed country assessments on the effects of ?nancial liberalization, including its striking impact on the banking sector. Although an important goal of ?nancial deregulation has been to help ?nancial institutions better perform their role in intermediating resources, the book models how deregulation may fail to achieve that goal in countries with underdeveloped ?nancial markets and institutions. For that purpose, the book draws on actual experience in Kenya, Malawi, Botswana, and Thailand. This book should constitute important reading for students of ?nancial economics, researchers and general academics, ?nancial practitioners, policymakers, and teachers of economics. North Carolina, USA Steven L. Schwarcz December 2008 Stanley A. Star Professor of Law & Business, Duke University Founding Director, Duke Global Capital Markets Center Durham vii Abstract and Preface The latest global ?nancial and economic crisis of 2008 shows the need to - examine the desirability of ?nancial liberalization and the basis for the view that ?nancial deregulation by itself cannot be considered as a substitute for better economic management. The literature on ?nancial liberalization has identi?ed various mechanisms through which removing controls on interest rates may impact economic growth.

Inhalt

185544_1_En_FM1_OnlinePDF.pdf 1
185544_1_En_1_Chapter_OnlinePDF.pdf 13
Chapter 1: Introduction 13
Contemporary Issues in Finance 13
Financial Repression 13
Financial Liberalization 14
Financial Crisis and Financial Contagion 14
International Capital Mobility/Capital Control 15
Financial Liberalization: Opposing Views 17
Approaches to Financial Liberalization 18
Financial Liberalization and Country Experience in Africa and Asia 19
Benefits of Financial Liberalization: An Empirical Issue 22
The Objectives of this Book 23
Methodology 24
Time Series Financial Econometrics 25
Cost Benefit Analysis 25
Contribution of this Book 25
The Structure of the Book 27
185544_1_En_2_Chapter_OnlinePDF.pdf 29
Chapter 2: Background, Structure and Financial Reforms 29
2.1 Introduction 29
2.2 The Case of Kenya 32
2.2.1 The Structure of the Financial System 34
2.2.2 Agricultural Sector and Other Policies Framework 39
2.2.3 Liberalization and the Era of Structural Adjustments 43
2.3 The Case of Malawi 45
2.3.1 Structure of the Financial System 50
2.3.2 Agricultural Sector and Other Policies Framework 54
2.4 The Case of Botswana 59
2.4.1 Structural Developments of the Financial System 64
2.4.2 Supplementing Role of Foreign Aid in Botswana: The Two-Gap Model 70
2.4.3 Trends and Policies in Agriculture and other Sectors 73
2.5 The Thai Financial System 78
2.6 Conclusion 79
185544_1_En_3_Chapter_OnlinePDF.pdf 80
Chapter 3: Literature Review 80
3.1 Introduction 80
3.2 Financial Development and Economic Development 82
3.3 Financial Liberalization 85
3.3.1 Financial Liberalization in Sub-Saharan Africa 94
3.3.2 The Thai Case 98
3.4 Conclusion 100
185544_1_En_4_Chapter_OnlinePDF.pdf 102
Chapter 4: The Theory of Financial Liberalization and its Economic Impact: An Assessment 102
4.1 Financial Liberalization 102
4.1.1 A Brief Theoretical Assessment 102
4.1.2 Observations from the Case Study 109
4.2 Contrasts Between the Theory and Country Performance 111
4.2.1 Introduction 111
4.2.2 Economic Impact of the Recent Financial Reforms: Kenya 112
4.2.3 Malawi 132
4.2.4 Botswana 140
4.3 Conclusion 150
Appendix 151
185544_1_En_5_Chapter_OnlinePDF.pdf 152
Chapter 5: An Analysis of the Economic Outcome of Financial Liberalization1 152
5.1 Introduction 152
5.2 A Simple Model of Imperfect Competition and Interest Rate Spread 153
5.2.1 Liberalization: Market Determined Outcome 155
5.2.2 Financial Repression 157
5.2.3 The Level of Fixed Costs as a Barrier to Entry 163
5.2.4 Graph of Fixed Costs and New Entry 166
5.2.5 Dynamics of how much the Interest Rate goes up after Liberalization 171
5.3 Financial Reforms and Absence of Entry by New Foreign Banks 173
5.4 Conclusion 179
Appendix A 5.1: Deriving the Market Equilibrium Condition for Loan Equation 180
Appendix A 5.2: Deriving the Fixed Cost Lines for Medium and Lower Regions at $${/mathop {{/bar r/,^c}}/ }$$ 182
Appendix A 5.3: Maximal Points for C and D Curves 183
185544_1_En_6_Chapter_OnlinePDF.pdf 185
Chapter 6: Testing the Potential Impact of Economic Changes on Savings in African Countries 185
6.1 Introduction 185
6.2 Econometric Research on the Effect of Various Financial Conditionings 186
6.3 Reforms and Savings Mobilization: Comparative Analysis 187
6.3.1 Measures of Financial Liberalization 197
6.3.2 Basic Theory and other Specifications 199
6.4 The Macroeconometric Model 200
6.4.1 VECM Set-up 202
6.5 Data and an Analysis of Econometric Results 204
6.6 Impacts of Market Liberalization on the Macroeconomy and Growth 216
6.6.1 Hypothetical scenario for Kenya and Malawi 222
6.7 Conclusion 226
Appendix 227
185544_1_En_7_Chapter_OnlinePDF.pdf 230
Chapter 7: Welfare Implications of Financial Liberalization in Thailand: A Cost-Benefit Analysis 230
Introduction 230
Financial Liberalization and its Implications in Thailand 231
Welfare Economics Framework: Social Choice and Cost Benefit Analysis of Globalization and Financial Liberalization 232
Costs and Benefits of Financial Liberalization (and Financial Crisis): Illustrative Numerical Estimation of the Costs and Bene 235
Financial Benefits 235
Financial Costs 236
Methodology, Numerical Estimates and Data Sources 236
Welfare Implications of Economic Growth 240
Conclusions 242
Appendix 1 General DataData drawn from previous work of the authors (see Clarke, M. and Islam, S. (2004), Economic Growth and 242
Appendix 2 Cost Benefit Data 246
185544_1_En_8_Chapter_OnlinePDF.pdf 257
Chapter Chapter 8: Summary, Findings and Conclusion 257
Background and Motivation 257
The Summary and Empirical Results 258
Policy and Institutional Implications 260
185544_1_En_BM2_Chapter_OnlinePDF.pdf 262
Appendix 262
1 Movement from Repression to Liberalization 262
: Index 300
: Bibliography 284

Produkt-Details

• Erscheint lt. Verlag: 3.10.2009
• Reihe/Serie: Contributions to Economics
• Reihe/Serie: Contributions to Economics
• Zusatzinfo: XVIII, 298 p. 42 illus., 20 illus. in color.
• Verlagsort: Heidelberg
• Sprache: englisch
• Themenwelt: Sozialwissenschaften ► Politik / Verwaltung
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre
• Schlagworte: Costs-Benefit Analysis • Developing Countries • Economic Development • Financial Liberalization • Time-series Models
• ISBN-10: 3-7908-2168-3 / 3790821683
• ISBN-13: 978-3-7908-2168-0 / 9783790821680