The role of finance in economic development: Benefits, risks, and politics

T.H.L. Beck

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

37 Citations (Scopus)


This article explores the role of the financial sector for economic growth, the causes and consequences of financial fragility, and the politics behind financial deepening and fragility. In doing so, it identifies the critical role of the financial sector within capitalist economies, a role with bright and dark sides. Specifically, it surveys the large theoretical and empirical literature that links a sound financial system to the process of economic development. It discusses the theoretical and empirical literature on bank fragility and banking crises and surveys the literature on the political economy of financial deepening. Importantly, it relates these three strands of the literature to each other and to the current crisis.
Original languageEnglish
Title of host publicationThe Oxford Handbook of Capitalism
EditorsD.C. Müller
Place of PublicationOxford
PublisherOxford University Press
Number of pages576
ISBN (Print)9780195391176
Publication statusPublished - 2012


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