DMCA
Government Ownership of Banks (2001)
| Venue: | Journal of Finance |
| Citations: | 198 - 5 self |
BibTeX
@ARTICLE{Porta01governmentownership,
author = {Rafael La Porta and Florencio Lopez-de-silanes and Andrei Shleifer},
title = {Government Ownership of Banks},
journal = {Journal of Finance},
year = {2001},
volume = {57},
pages = {265--301}
}
Share
 |
 |
 |
 |
||
OpenURL
Abstract
We assemble data on government ownership of banks around the world. The data show that such ownership is large and pervasive, and higher in countries with low levels of per capita income, backward financial systems, interventionist and inefficient governments, and poor protection of property rights. Higher government ownership of banks in 1970 is associated with slower subsequent financial development and lower growth of per capita income and productivity. This evidence supports "political" theories of the effects of government ownership of firms. * Harvard University. We are grateful to Thorsten Beck, Mihir Desai, Simeon Djankov, Edward Glaeser, Simon Johnson, David Laibson, Ross Levine, Dani Rodrik, Ren Stulz, and two anonymous referees for helpful comments, to Karine Del Paso, Magdalena Lopez-Morton, Dmitry Rozhkov and Ekaterina Trizlova for research assistance, and to the National Science Foundation, the Dean's Research Fund at the Kennedy School of Government, Harvard University, and the Ira Katz Research Fund at the University of Michigan for financial support. This paper discusses a neglected aspect of financial systems of many countries: government ownership of banks. It shows that such ownership is pervasive around the world, and has had significant consequences for economic and financial development. There are two broad views of the government's participation in financial markets. The first, basically optimistic, "development" view is associated with Alexander Gerschenkron (1962), who focuses on the necessity of financial development for economic growth. Gerschenkron argues that privately owned commercial banks have been the crucial vehicle of channeling savings into industry in several industrializing countries in the second half of the nineteenth century, es...
Keyphrases
government ownership financial development caput income financial system harvard university nineteenth century inefficient government poor protection broad view karine del paso simon johnson economic growth low level national science foundation anonymous referee financial market mihir desai neglected aspect subsequent financial development commercial bank ira katz research fund dmitry rozhkov financial support thorsten beck helpful comment simeon djankov crucial vehicle assemble data dani rodrik many country significant consequence ross levine political theory second half ekaterina trizlova data show ren stulz magdalena lopez-morton research assistance development view david laibson alexander gerschenkron edward glaeser property right kennedy school research fund
