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When Do Special Interests Run Rampant? Disentangling the Role in Banking Crises of Elections, Incomplete Information, and Checks and Balances

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dc.contributor.authorKeefer, Philip
dc.date.accessioned2014-09-04T21:22:07Z
dc.date.available2014-09-04T21:22:07Z
dc.date.issued2001-02
dc.description.abstractThe author investigates the political determinants of government decisions that benefit special interest groups - especially government decisions to deal with banking crises. He finds that the better informed the voters, the more proximate elections, and the larger the number of political veto players ( conditional on the costs to voters of relevant policy decision), the smaller the government's fiscal transfer are to the financial sector and the less likely the government is to exercise forbearance in dealing with insolvent financial institutions. The results suggest that policies that might be appropriate for mitigating banking crises in the United States might be less effective in settings where voters are less informed, where elections are less competitive, and where there are fewer veto players, because in these settings checks and balances are missing. These policies include: a) Disseminating information about the costs of inefficient government decisions. b) Improving the structure of legislative regulatory oversight. c) Intervening early in insolvent banks. The author concludes that the more veto players there are, the less likely policies are to favor special interest groups (contrary to previous views). Moreover, the closer the elections, the less likely policies are to favor special interest groups.en
dc.identifier.doi10.1596/1813-9450-2543
dc.identifier.urihttps://hdl.handle.net/10986/19966
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2543
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectInterest groups; Elections; Political decision making; Veto; Banking crises; Bank insolvency; Government role; Legislative oversight; Information dissemination; Checks & balances
dc.titleWhen Do Special Interests Run Rampant? Disentangling the Role in Banking Crises of Elections, Incomplete Information, and Checks and Balancesen
dspace.entity.typePublication
okr.crossref.titleWhen Do Special Interests Run Rampant? Disentangling the Role in Banking Crises of Elections, Incomplete Information, and
okr.date.disclosure2001-03-20
okr.date.doiregistration2025-04-10T10:54:00.866412Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.guid971621468766757124
okr.identifier.doi10.1596/1813-9450-2543
okr.identifier.reportWPS2543
okr.language.supporteden
okr.sectorPublic Administration, Law, and Justice :: Public administration- Finance
okr.sectorFinance :: Banking
okr.topicFinance and Financial Sector Development::Financial Crisis Management & Restructuring
okr.topicGovernance::Election Systems
okr.topicGovernance::Governance and the Financial Sector
okr.topicGovernance::Political Systems and Analysis
okr.unitRegulation and Competition Policy, Development Research Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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