Arbeitspapier
Why isn't there more financial intermediation in developing countries?
This paper proposes to organize thinking about the opportunities for improving and extending financial markets and safety nets for the poor, by focusing on factors that may explain why the linkage of local financial networks and safety nets with the larger economy often fails or is incomplete. Understanding the nature of these impediments is the first step in proposing policies to help promote more effective linkage and intermediation. We propose four explanations for the slowness of adoption of intermediation (high costs of delegated monitoring aggravated by limited intermediary capital; lock-in and crowding out effects from local insurance arrangements, social norms against cooperation with intermediaries; and political resistance to new institutions that shift the balance of power in local polities). Of course, financial repression and weak legal systems remains important as cause of lack of intermediation. We conclude with a review of public policy for more effective intermediation.
- ISBN
-
929190175X
- Language
-
Englisch
- Bibliographic citation
-
Series: WIDER Discussion Paper ; No. 2002/28
- Classification
-
Wirtschaft
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Agricultural Finance
Economic History: Financial Markets and Institutions: General, International, or Comparative
- Subject
-
financial intermediation
mutual insurance
safety nets
microfinance
microcredit
Finanzintermediär
Entwicklungsländer
Privatversicherung
Mikrofinanz
- Event
-
Geistige Schöpfung
- (who)
-
Conning, Jonathan
Kevane, Michael
- Event
-
Veröffentlichung
- (who)
-
The United Nations University World Institute for Development Economics Research (UNU-WIDER)
- (where)
-
Helsinki
- (when)
-
2002
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Conning, Jonathan
- Kevane, Michael
- The United Nations University World Institute for Development Economics Research (UNU-WIDER)
Time of origin
- 2002