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Thesis

French

ID: <

10670/1.a8ra2p

>

Where these data come from
Development and financial systems structure : Studying the role of democracy and democratic transition

Abstract

This thesis analyzes the relationship between the political regime and the financial system. Specifically, the empirical research conducted throughout this thesis aims to study the role of democracy in the development and structure of financial systems. To this end, we proceed in three steps. First, we examine the impact of the event of the democratic transition in the financial development of the countries that have moved towards democracy. Thus, having defined what is meant by a developed financial system and highlighted the factors that determine its evolution, we show that the transition to a democratic regime increases the size of the financial system in the medium and long term. However, it will have no short-term effect (chapter 1). In a second step, we focus on the factors that influence the effectiveness of this political regime. Indeed, since the exchange of theoretical arguments reflect a lack of consensus on the relationship between democracy and development, it seems important to otherwise understand this issue through the consideration of the role of the institutional environment in the analysis of this relationship (chapter 2). Thus, we show that democracy contributes to the development of the financial sector in the presence of good institutions while it hinders its development where institutional quality is below a certain threshold. Finally, we try to extend the existing literature by questioning the role of democracy in the explanation of the financial system architecture (chapter 3). Having reviewed the main factors influencing the shape of the financial system, we show that the political system is a determining factor in the financial structure of emerging economies. More precisely, we find that further democracy reduces the share of intermediated financing and expands the role of stock markets.

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