We use a new dataset of de jure measures of trade, capital account, product market, and domestic financial regulation for 91 countries from 1973 to 2005 to test Rajan and Zingales's (2003) interest group theory of financial development. In line with the theory, we find strong evidence that trade...

We examine the effects of public sector borrowing from the domestic banking system on financial development in middle-income countries. While these countries'' external debt has been falling, the share of bank credit absorbed by the public sector has been rising rapidly. We argue that this runs...

Intro -- Contents -- I. INTRODUCTION -- II. HOW IMPORTANT IS PUBLIC SECTOR CREDIT, AND WHERE? -- III. HOW PUBLIC SECTOR CREDIT COULD HARM FINANCIAL DEVELOPMENT -- IV. DOES PUBLIC SECTOR CREDIT AFFECT THE DEPTH OF FINANCIAL DEVELOPMENT? -- V. DOES PUBLIC SECTOR CREDIT AFFECT THE QUALITY OF...

This volume examines the impact on economic performance of structural policies-policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. The results reflect a new dataset covering reforms of domestic product markets,...