Financial sector strategies and financial sector outcomes: Do the strategies perform?

Martin Melecký and Anca Maria Podpiera

Economic Systems, 2020, vol. 44, issue 2

Abstract: Financial sector strategies enable financial policymakers and stakeholders to take a holistic view at the financial development needs in their country and to formulate balanced financial policies. They help policymakers consider the systemic risk that different development policies involve and choose an informed way forward. We construct a new dataset of historical financial sector strategies covering 150 countries over the period 1985–2014, and assess the strategies using the rating criteria proposed by Maimbo and Melecky (2014). We then investigate how the quality of the strategies can affect financial sector outcomes such as financial depth, inclusion, efficiency and stability. We find that the use of financial sector strategies helped increase financial sector deepening, inclusion and stability, and that this impact could be greater for higher quality strategies. One way how financial sector strategies can improve financial sector outcomes is by improving the regulatory framework for finance. A significant relationship between the use of strategies and the efficiency of banks is not confirmed.

Keywords: Financial sector strategies; Financial depth; Stability; Efficiency; Inclusion; Policy coordination; Policy tradeoffs (search for similar items in EconPapers)
JEL-codes: G20 G28 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Financial sector strategies and financial sector outcomes: do the strategies perform? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:44:y:2020:i:2:s0939362518304837

DOI: 10.1016/j.ecosys.2020.100757

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