Working Papers - details - WEF0011
WEF0011
Government Ownership of Banks, Institutions, and Financial Development
Svetlana Andrianova, Panicos Demetriades, Anja Shortland
May 2006
View this working paper
Abstract
Using a suitably modified locational model of banking, we examine the influence of institutions, such as deposit contract enforcement, in explaining the share of government owned banks in the banking system. We present cross-country evidence suggesting that institutional factors are relatively more important determinants of the share of state banks than political or historical ones. We argue that rather than privatizing or subsidizing state banks governments in developing countries should build institutions that foster the developnment of private banking.
View Demetriades' Project details
Back to Working Papers Index
