Informational Quality of Financial Systems and Economic Development: An Indicators Approach for East Asia
Asian Development Bank Institute Working Paper No. 20
66 Pages Posted: 29 Jul 2001
Date Written: June 2001
Abstract
The relation between the "informational quality" of financial systems and economic development is assessed for 21 OECD and 34 emerging market economies (EMEs) following Asia's 1997-98 crisis. Institutional economics suggest that the heart of any financial system is its institutional-informational infrastructure and long-term contracting capabilities. Twenty-seven microeconomic and institutional indicators are assessed to gauge the informational aspects of financial systems for 1995-1998 (with preliminary data for 1985). Recent institutional reforms are assessed vis-a-vis a statistical benchmark. This suggests disproportionate gains in per capita GDP from improving social infrastructure and that better enforcement rather than origins of legal systems are critical.
Keywords: information costs, quality of financial systems, economic development
JEL Classification: E44, G20, O10
Suggested Citation: Suggested Citation
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