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Preface

Published online by Cambridge University Press:  30 January 2010

Aldo Musacchio
Affiliation:
Harvard Business School
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Summary

When I started to do research for this book, debate about the policies and legal institutions necessary for the development of financial markets around the world was intensifying both in academic circles and in international financial agencies. As academics reached near consensus on the importance of financial development to foster economic growth, the development of financial markets became a goal of international development agencies and governments in most countries. Discussion moved from how important it was to have stock markets versus banks to how countries could develop financial markets in general. To devise policies that could help countries develop financial markets, however, academics and policy makers first had to understand why financial markets are more developed in some countries than in others.

A natural candidate for explaining these differences was variation in legal institutions across countries. But although social scientists agree that institutions are important in explaining economic and financial development, there is no agreement as to which institutions generate, and which are incidental to, financial prosperity. It could be the case, for example, that important changes in institutions and regulations in the already highly developed U.S. financial system were demanded by actors to further improve the functioning of that market. If so, institutions that favor the development of financial markets might be a consequence rather than a cause of financial development.

Researchers therefore sought to explain the variance in financial markets by looking for institutional differences across countries that would not be a consequence of financial market development.

Type
Chapter
Information
Experiments in Financial Democracy
Corporate Governance and Financial Development in Brazil, 1882–1950
, pp. xv - xx
Publisher: Cambridge University Press
Print publication year: 2009

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  • Preface
  • Aldo Musacchio, Harvard Business School
  • Book: Experiments in Financial Democracy
  • Online publication: 30 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511635427.001
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  • Preface
  • Aldo Musacchio, Harvard Business School
  • Book: Experiments in Financial Democracy
  • Online publication: 30 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511635427.001
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Preface
  • Aldo Musacchio, Harvard Business School
  • Book: Experiments in Financial Democracy
  • Online publication: 30 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511635427.001
Available formats
×