Global Contagion of Financial Reforms

Nan Li, Chris Papageorgiou (), Tong Xu and Tao Zha

No 2024/243, IMF Working Papers from International Monetary Fund

Abstract: We construct an extensive database of domestic financial reforms spanning 90 countries from 1973 to 2014. Utilizing this dataset, we estimate a structural model that incorporates various factors identified in the existing literature to explain the global contagion of financial reforms. Our findings reveal that (1) geopolitical influence and cross-country learning were the primary drivers behind the marked increase in financial reforms globally during the 1990s, and (2) the observed reversals of financial reforms in developing countries after the global financial crisis were driven by shifts in beliefs about the impact of these reforms on growth.

Keywords: Financial reforms; global contagion; geopolitical influence; cross- country learning; belief updating; reform reversal; reform intensity; political costs; economic growth; financial crisis; IMF working paper 24/243; reform contagion; financial liberalization; liberalization level; Financial contagion; Global financial crisis of 2008-2009; Financial sector; Global (search for similar items in EconPapers)
Pages: 57
Date: 2024-11-22
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