The Political Economy of Financial Systems

Evidence from Suffrage Reforms in the Last Two Centuries

H.A. Degryse, T. Lambert, A. Schwienbacher

Research output: Working paperDiscussion paperOther research output

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Abstract

Abstract: Initially, voting rights were limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets. Our panel data evidence covering 1830-1999 shows that tighter restrictions on the voting franchise induce a greater stock market development, whereas a broader voting franchise is more conducive towards the banking sector, consistent with Perotti and von Thadden (2006). Our results are robust to controlling for other political determinants and endogeneity.
Original languageEnglish
Place of PublicationTilburg
PublisherEBC
Number of pages59
Volume2013-008
Publication statusPublished - 2013

Publication series

NameEBC Discussion Paper
Volume2013-008

Fingerprint

Financial system
Franchise
Political economy
Stock market
Voting
Political support
Median voter
Uncertainty
Stock market development
Endogeneity
Voting rights
Banking development
Elites
Panel data
Financial returns
Banking sector

Keywords

  • banking sector
  • financial development
  • financial structure
  • political economy
  • stock markets
  • voting franchise

Cite this

Degryse, H. A., Lambert, T., & Schwienbacher, A. (2013). The Political Economy of Financial Systems: Evidence from Suffrage Reforms in the Last Two Centuries. (EBC Discussion Paper; Vol. 2013-008). Tilburg: EBC.
Degryse, H.A. ; Lambert, T. ; Schwienbacher, A. / The Political Economy of Financial Systems : Evidence from Suffrage Reforms in the Last Two Centuries. Tilburg : EBC, 2013. (EBC Discussion Paper).
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Degryse, HA, Lambert, T & Schwienbacher, A 2013 'The Political Economy of Financial Systems: Evidence from Suffrage Reforms in the Last Two Centuries' EBC Discussion Paper, vol. 2013-008, EBC, Tilburg.

The Political Economy of Financial Systems : Evidence from Suffrage Reforms in the Last Two Centuries. / Degryse, H.A.; Lambert, T.; Schwienbacher, A.

Tilburg : EBC, 2013. (EBC Discussion Paper; Vol. 2013-008).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - The Political Economy of Financial Systems

T2 - Evidence from Suffrage Reforms in the Last Two Centuries

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AU - Lambert, T.

AU - Schwienbacher, A.

N1 - Pagination: 59

PY - 2013

Y1 - 2013

N2 - Abstract: Initially, voting rights were limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets. Our panel data evidence covering 1830-1999 shows that tighter restrictions on the voting franchise induce a greater stock market development, whereas a broader voting franchise is more conducive towards the banking sector, consistent with Perotti and von Thadden (2006). Our results are robust to controlling for other political determinants and endogeneity.

AB - Abstract: Initially, voting rights were limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets. Our panel data evidence covering 1830-1999 shows that tighter restrictions on the voting franchise induce a greater stock market development, whereas a broader voting franchise is more conducive towards the banking sector, consistent with Perotti and von Thadden (2006). Our results are robust to controlling for other political determinants and endogeneity.

KW - banking sector

KW - financial development

KW - financial structure

KW - political economy

KW - stock markets

KW - voting franchise

M3 - Discussion paper

VL - 2013-008

T3 - EBC Discussion Paper

BT - The Political Economy of Financial Systems

PB - EBC

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Degryse HA, Lambert T, Schwienbacher A. The Political Economy of Financial Systems: Evidence from Suffrage Reforms in the Last Two Centuries. Tilburg: EBC. 2013. (EBC Discussion Paper).