The Politics of Financial Development and Capital Accumulation

Tarishi Matsuoka, Katsuyuki Naito and Keigo Nishida

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a simple analytical model to examine conditions in which a government policy to improve imperfect credit markets is practiced through a democratic political process, and analyzes interactions between the politically implemented policy and economic development. Individuals who support the policy are those who can start new investments only after the implementation of it. High income inequality and the low level of capital make the policy hard to implement, which is likely to cause the economy to fall into a poverty trap.

Keywords: financial development; economic development; income inequality; majority voting (search for similar items in EconPapers)
JEL-codes: D72 G18 O11 O15 O16 (search for similar items in EconPapers)
Date: 2013-09-25
New Economics Papers: this item is included in nep-cdm and nep-pol
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https://mpra.ub.uni-muenchen.de/50181/1/MPRA_paper_50181.pdf original version (application/pdf)

Related works:
Journal Article: THE POLITICS OF FINANCIAL DEVELOPMENT AND CAPITAL ACCUMULATION (2019)
Working Paper: The Politics of Financial Development and Capital Accumulation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50181

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