Reaching out to the unbanked: The role of political ideology in financial inclusion

Abe de Jong, Abu Zafar Shahriar and Farhan Shazia

Journal of International Money and Finance, 2022, vol. 126, issue C

Abstract: This paper studies the effect of political ideology on household financial inclusion. Financial inclusion is the access to formal financial services and provides an entry key for people to participate in the economy. Using granular data of 65 countries, we find that financial inclusion is higher under right-wing regimes than under left-wing governments. We use regression discontinuity design and propensity-score matching to address endogeneity issues. We investigate multiple channels for the effect and conclude that right-wing market-oriented policies are more successful in enhancing financial inclusion than left-wing societal policies.

Keywords: Financial inclusion; Government ideology; Political ideology; Mobile banking (search for similar items in EconPapers)
JEL-codes: G2 G21 G51 P16 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:126:y:2022:i:c:s026156062200081x

DOI: 10.1016/j.jimonfin.2022.102678

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