When do special interests run rampant ? disentangling the role in banking crises of elections, incomplete information, and checks and balances

About

Countries

Data & Research

Learning

News

Projects & Operations

Publications

Topics

Home > Data & Research > Research > Author Profile > Report Details

When do special interests run rampant ? disentangling the role in banking crises of elections, incomplete information, and checks and balances, Volume 1

Author:	Keefer, Philip;	Collection Title:	Policy, Research working paper ; no. WPS 2543
Date Stored:	2001/03/20	Document Date:	2001/02/28
Document Type:	Policy Research Working Paper	Language:	English
Major Sector:	Public Administration, Law, and Justice	Report Number:	WPS2543
Sub Sectors:	Other Public Sector Management	Volume No:	1

Summary: The author investigates the political determinants of government decisions that benefit special interest groups - especially government decisions to deal with banking crises. He finds that the better informed the voters, the more proximate elections, and the larger the number of political veto players ( conditional on the costs to voters of relevant policy decision), the smaller the government's fiscal transfer are to the financial sector and the less likely the government is to exercise forbearance in dealing with insolvent financial institutions. The results suggest that policies that might be appropriate for mitigating banking crises in the United States might be less effective in settings where voters are less informed, where elections are less competitive, and where there are fewer veto players, because in these settings checks and balances are missing. These policies include: a) Disseminating information about the costs of inefficient government decisions. b) Improving the structure of legislative regulatory oversight. c) Intervening early in insolvent banks. The author concludes that the more veto players there are, the less likely policies are to favor special interest groups (contrary to previous views). Moreover, the closer the elections, the less likely policies are to favor special interest groups.


Official Documents Official, scanned versions of documents (may include signatures, etc.)
File Type		Description	File Size (mb)

	PDF 54 pages	Official version*	3.78 (approx.)
	Text	Text version**


Light-Weight Documents Lighter (less MB) documents which may or may not be the final, official version
File Type		Description	File Size (mb)

	PDF 44 pages	WPS2543	0.19

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.

** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.

Permanent URL for this page: http://go.worldbank.org/QTSGQTJ9Z0