Government Ownership of Banks, Institutions, and Financial Development

Svetlana Andrianova (), Panicos O. Demetriades () and Anja K. Shortland ()

No 02/13, Discussion Papers in Economics from Department of Economics, University of Leicester

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 development of private banking.

Keywords: Regulation; opportunistic banks; institutional quality (search for similar items in EconPapers)
JEL-codes: D82 G21 G28 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-mfd and nep-pke
Date: 2002-11, Revised 2006-08
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Related works:
Journal Article: Government ownership of banks, institutions, and financial development (2008)
Working Paper: Government Ownership of Banks, Institutions, and Financial Development (2006)
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