Democracy and Reforms: Evidence from a New Dataset

Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for 150 countries over the period 1960-2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.

Prudential Regulation and Supervision of the Banking Sector and Banking Crises: A Cross Country Empiricial Investigation

The main purpose in this study is to see empirically whether there really exists a clear association between weaknesses in the regulation and supervision of the banking sector and banking crises. Test results indicate that capital regulations are a major factor in the prevention of crises, giving important support to the propositions towards ensuring higher capital requirements. However, tighter capital regulations do not seem to mitigate the negative impact of moral hazard problem generated by generous deposit insurance system. While inflation has a significant role in the generation of crisis, its significance weakens to a major extent, when accompanied with regulatory and supervisory factors. Hence, the significance of regulatory and supervisory framework of the banking system is once more justified.Banking Regulation and Supervision, Banking Crisis.

The Political Economy of Financial Regulation Policies Following the Global Crisis

This paper analyses the efficiency of financial regulation reforms that are being supported in a variety of theoretical approaches after the 2007/2008 global crisis. The main challenges that prevent the efficiency of the reforms are; (i) maintaining the Basel approach that is argued to have led to the financial crisis, (ii) its limited content, (iii) its lack of global and national financial infrastructure (iv) not being designed in a framework that comprises the macropolicies. Due to the reasons mentioned above, this paper argues that the regulation policy can neither fulfil its stability role nor its distributive role and that in this way, it restructures forthcoming crisis, not the financial sector. In order to prevent crises, a critical approach is required on the mode of regulation of the economy and a reorganisation of capitalism is necessary on a larger scale. Keywords: Government Policy and Regulation, Financial Crises, Crisis Management. JEL Classification: G18, G01, H1

Democracy and Reforms

Empirical evidence on the relationship between democracy and economic reforms is scarce, limited to few reforms and countries and for few years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital, public, and banking sectors, product and labor markets, agriculture, and trade for 150 countries over the period 1960-2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.economic liberalization, transition, political economy

Regulating Asset Price Risk

There has been a long debate about whether speculators are stabilizing or not. We consider a model where speculators have a stabilizing role in normal times, but may also provoke large risk panics. The very feature that makes arbitrageurs liquidity providers in normal times, namely their tolerance of risk, enables a large increase in asset price risk during a financial panic. We show that a policy that discourages balance sheet risk reduces the magnitude of financial panics, as well as asset price risk in both normal and panic states.Asset Pricing, Risk Management, Leverage.

Prudential Regulation and Supervision Instruments and Aims: A General Framework

The aim of the present note is to outline a general, but at the same time comprehensive, framework of the array of instruments that regulators can use in their activity of prudential regulation and supervision. Such a framework should be applicable to a variety of geographical and historical contexts and should aid cross-country and temporal comparisons concerning regulation activity. It is an extension and a reorganization of White's (2009) categorization, which in turn is built on Mishkin's (2001) work. The novelty of the resulting framework is a clear distinction between the tools, the aims and the institutional setting of prudential regulation.

Democracy and stock market performance in developing countries

This is paper is a natural extension of Yang (2011) where-in democracy is not positively related to stock market development. We postulate that when moment conditions of stock market performance are accounted for, democracy improves financial markets in developing countries. Channels of democracy, polity and autocracy are instrumented with legal-origins, religious-legacies, income-levels and press-freedom qualities. As a policy implication democracies have important effects on both the degree of competition for public office and the quality of public policies that favor stock market performance in developing countries.Financial Markets; Government Policy; Political Economy; Development

Public Banks and the Productivity of Capital

Weak institutions are shown to create scope for public banks to play a growth-promoting role, even if such banks are less efficient than private banks.Economic growth; governance; regulation

A Century of Bond Ratings as a Business

Historical accounting datasets about a leader of the bond rating industry have been gathered in order to provide an unprecedented long term view on this business. To better judge of the dynamics at play, similar data for representatives of older and broader business fields is also introduced. Overall, this empirical discussion plays down the importance of regulatory « licenses » given to bond rating firms and puts forward the coming of a « modern » business model where issuers pay for ratings.Industry study, bond ratings, financial regulation

Hospital Efficiency: An Empirical Analysis of District and Grant-in-Aid Hospitals in Gujarat

This study focuses on analysing the hospital efficiency of district level government hospitals and grant-in-aid hospitals in Gujarat. The study makes an attempt to provide an overview of the general status of the health care services provided by hospitals in the state of Gujarat in terms of their technical and allocative efficiency. One of the two thrusts behind addressing the issue of efficiency was to take stock of the state of healthcare services (in terms of efficiency) provided by grant-in-aid hospitals and district hospitals in Gujarat. The motivation behind addressing the efficiency issue is to provide empirical analysis of governments policy to provide grants to not-for-profit making institutions which in turn provide hospital care in the state. The study addresses the issue whether grant-in-aid hospitals are relatively more efficient than public hospitals. This comparison between grant-in-aid hospitals and district hospitals in terms of their efficiency has been of interest to many researchers in countries other than India, and no consensus has been reached so far as to which category is more efficient. The relative efficiency of government and not-for-profit sector has been reviewed in this paper. It is expected that the findings of the study would be useful to evaluate this policy and help policy makers to develop benchmarks in providing the grants to such institutions.