This paper pulls together existing theory and evidence to assess whether international financial liberalization, by improving the functioning of domestic financial markets and banks, accelerates economic growth. The analysis suggests that the answer is “yes.” First, liberalizing restrictions on international portfolio flows tends to enhance stock market liquidity. In turn, enhanced stock market...

Promoting Entrepreneurship in Developing Countries: Policy Challenges T RECENT ENTHUSIASM OF DONORS, DEVELOPMENT agencies and governments for promoting entrepreneurship as a route to development is perplexing. Entrepreneurs, called “heroes” by The Economist (14 March, 2009), appear upon closer scrutiny to be rather irrelevant and even impotent in many developing countries. Three decades ago, Na...

The economic vitality of many communities has declined as a result of changes in their economic structures. In some places, economic growth is being fostered by the inmigration of retirees. This exploratory study investigated the importance of public recreation services and parks in retirees’ choice of community, using a random sample of retired persons who had moved to South Carolina in the pa...

Over the past 15 to 20 years, financial inclusion has gained traction as an area of study that is pertinent to ensuring inclusive economic growth and reducing wealth inequality. Participation in the financial mainstream by maintaining a standard bank account, enables households to build savings, accrue wealth, build credit, expand business enterprises and invest in education. To date, much of t...

Using data for more than 160 countries in the period 1997–2010, we explore the impact of large-scale natural disasters on the distance-to-default of commercial banks. The financial consequences of natural catastrophes may stress and threaten the existence of a bank by adversely affecting their solvency. After extensive testing for the sensitivity of the results, our main findings suggest that n...

VER THE LAST few years, the issue of corruption—the abuse of public office for private gain—has attracted renewed interest, both among academics and policymakers. There are a number of reasons why this topic has come under fresh scrutiny. Corruption scandals have toppled governments in both major industrial countries and developing countries. In the transition countries, the shift from command ...

I the last twenty years, there has been substantial rethinking about how central banks should do their job. This rethinking has led to major changes in how central banks operate, and we are now in an era in which central banks in many countries throughout the world have had notable success—keeping inflation low, while their economies experience rapid economic growth. In this lecture, I outline ...

A growing and deepening divide has opened up between transition countries where economic development has taken off and those caught in a vicious cycle of institutional backwardness and macroeconomic instability. This “Great Divide” is visible in almost every measure of economic performance: GDP growth, investment, government finances, growth in inequality, general institutional infrastructure a...