Elections, special interests, and the fiscal costs of financial crisis, Vol. 1 of 1

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Elections, special interests, and the fiscal costs of financial crisis

Author:	Keefer, Philip;	Collection Title:	Policy, Research working paper ; no. WPS 3439
Country:	World;	Date Stored:	2004/11/09
Document Date:	2004/10/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	The World Region
Report Number:	WPS3439	SubTopics:	Payment Systems & Infrastructure; Economic Theory & Research; Financial Crisis Management & Restructuring; Banks & Banking Reform; National Governance; Decentralization; Financial Intermediation
Volume No:	1 of 1

Summary: The author proposes a new approach to explain why the costs of crisis are greater in some countries than in others. He begins with the premise that many crises result from the willingness of politicians to cater to special interests, at the expense of broad social interests. A parsimonious model predicts that the less costly it is for average citizens to expel politicians, the more veto players there are; the less important are exogenous shocks, and the more difficult it is for politicians and special interests to forge credible agreements, the lower the costs of crisis are. Though these predictions differ from those in the literature, empirical evidence presented shows that they explain the fiscal costs of financial crisis, even after controlling for the financial sector policies believed to contribute most to the efficient prevention, and resolution of financial crisis.


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	PDF 49 pages	Official version*	0.34
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File Type		Description	File Size (mb)

	PDF 49 pages	WPS3439	0.23

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