Financial sector development

About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.

The Relationship between Financial Development and Economic Growth in Africa

Abstract: This study examines the relationship between financial development and economic growth. It presents evidence on a cross section of 50 African countries whose data is available for the period 1980-2008. Two proxies of financial development are employed: the ratio of credit to the private sector to total GDP and the ratio of broad money (M2) to total GDP. We establish a positive relationship between financial development and economic growth. However, we find that the relationship between private sector credit and economic growth is much stronger than the relationship between money supply and economic growth. In addition, we find that the relationship between financial sector development and economic growth is bi-directional. The results suggest that both the financial sector and the real sector are important in influencing Africa’s current and future growth trajectory.

Asia in Global Governance: A Case for Decentralized Institutions

Abstract: The global economic crisis refocused attention on the governance of international economic institutions (IEIs). This study uses the analytical framework of club theory to highlight structural obstacles to reform in international macroeconomic management, development finance, trade, and financial stability. The authors argue that reforms currently being discussed - for example, in voting power in the International Monetary Fund and the World Bank - are important, but not sufficient to make IEIs adaptable to the demands of a rapidly changing world economy. The authors propose transforming IEIs by shifting more decisions from the global to sub-global level. Partially decentralized decision making already exists in some policy areas (for example in regional development banks) and could expand and improve the provision of international public goods.

Financing information and communication infrastructure needs in the developing world - public and private roles

Abstract: Over the past ten years, private-sector-led growth has revolutionized access to telecommunications. Every region of the developing world did benefit in terms of investment, and rollout. This revolution would have been impossible without government reform, and oversight. Advanced information and communication infrastructure (ICI) are increasingly important to doing business in a globalizing world. Governments, enterprises, civil society, workers, and poor populations in the developing countries need more affordable access. This report proposes strategies that governments can carry out to attract private investment, and ensure the continued evolution, and spread of information and communication infrastructure. These strategies encompass more than sector policy alone, for investment decisions are based on a wide range of factors including, for example, the roles played by financial sector development, and the broader investment environment. The strategies also include potential public sector investments that can catalyze ICI rollout in sub-sectors where the private sector is not prepared to intervene on its own.

Financial sector development and growth in small open economies

Abstract: This article investigates the Granger causal relationship between financial development and economic growth for four small open economies over the period 1960 to 2003. Both long- and short-run Granger causality tests are used to assess the finance-growth nexus. The results suggest that there is a positive association between financial development and growth in all countries. However, the long-run causality tests show that growth tends to lead financial development in Singapore and Jamaica, financial development leads growth in Trinidad and Tobago and there is a bidirectional link in Barbados. These results therefore suggest that cross-country studies could overstate the impact of financial development on growth, since they ignore differences – even in relatively homogenous groups.

Housing and Housing Finance - A Review of the Links to Economic Development and Poverty Reduction

Abstract: The links between housing, finance, and inclusive growth are explored in this paper. The benefits of improved housing accrue through better health, based on improved water and sanitation, and through large multiplier effects in terms of output and the employment of skilled and poorer, unskilled workers. The evidence also suggests that housing finance helps develop the financial sector (contributing to economic growth) and is also helped by financial sector development. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in M anila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.