Financial Policymaking after Crises: Public vs. Private Interests

Arbeitspapier

We first present a simple model of post-crisis policymaking driven by both public and private interests. Using a novel dataset covering 94 countries between 1973 and 2015, we then establish that financial crises can lead to government interventions in financial markets. Consistent with a public interest channel, we find post-crisis interventions occur only in democratic countries. However, by using a plausibly exogenous setting -i.e., term limits- muting political accountability, we show that democratic leaders who do not have re-election concerns are substantially more likely to intervene in financial markets after crises, in ways that may promote (obstruct) private (public) interests.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9131

Classification and Topics

• Classification: Wirtschaft ; Financial Crises ; Financial Institutions and Services: Government Policy and Regulation ; Capitalist Systems: Planning, Coordination, and Reform ; Capitalist Systems: Political Economy
• Subject: financial crises ; reform reversals ; democracies ; term-limits ; special-interest groups

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Saka, Orkun ; Ji, Yuemei ; De Grauwe, Paul
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236673
• Last update: 10.03.2025, 11:44 AM CET