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http://ssrn.com/abstract=1265751
 
 

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Landed Interests and Financial Underdevelopment in the United States


Raghuram G. Rajan


University of Chicago - Booth School of Business; International Monetary Fund (IMF); National Bureau of Economic Research (NBER)

Rodney Ramcharan


Board of Governors of the Federal Reserve System (FRB)

September 9, 2008

Chicago GSB Research Paper No. 08-12
U of Chicago GSB Working Paper No. 21

Abstract:     
Landed elites in the United States in the early decades of the twentieth century played a significant role in restricting the development of finance. States that had higher land concentration passed more restrictive banking legislation. At the county level, counties with very concentrated land holdings tended to have disproportionately fewer banks per capita.

Banks were especially scarce both when landed elites' incentive to suppress finance, as well as their ability to exercise local influence, was higher. Finally, the resulting financial underdevelopment was negatively correlated with subsequent manufacturing growth. We draw lessons from this episode for understanding economic development.

Number of Pages in PDF File: 55

JEL Classification: G20, O16, O43

working papers series


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Date posted: September 11, 2008  

Suggested Citation

Rajan, Raghuram G. and Ramcharan, Rodney, Landed Interests and Financial Underdevelopment in the United States (September 9, 2008). U of Chicago GSB Working Paper No. 21; U of Chicago GSB Working Paper No. 21. Available at SSRN: http://ssrn.com/abstract=1265751 or http://dx.doi.org/10.2139/ssrn.1265751

Contact Information

Raghuram G. Rajan (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4437 (Phone)
773-702-0458 (Fax)
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-9299 (Phone)
773-702-0458 (Fax)
Rodney Ramcharan
Board of Governors of the Federal Reserve System (FRB) ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
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