Développement financier, instabilité financière et réduction de la pauvreté

This article investigates how financial development is beneficial to the reduction of poverty, on the one hand by promoting growth and on the other hand directly due to the Mac Kinnon “conduit effect”. But simultaneously financial development induces financial instability what is detrimental to the poor and dampened the positive effect of financial development on the reduction of poverty. These hypotheses are tested with success on a sample of developing countries over the period 1966-2000 and lead to straightforward policy implications.