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Domestic bank reform and the contingent nature of the structural power of finance in emerging markets
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Dafe, Florence and Rethel, Lena (2022) Domestic bank reform and the contingent nature of the structural power of finance in emerging markets. Politics & Society, 50 (4). pp. 571-598. doi:10.1177/00323292221125567 ISSN 0032-3292.
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Official URL: https://doi.org/10.1177/00323292221125567
Abstract
This article examines the structural power of domestic finance in Developing and Emerging Economies (DEEs) in the context of a shift towards increasingly activist financial development planning and financial sector reform. Our analysis focuses specifically on efforts to create large, internationally competitive banks in Malaysia and Nigeria dating to the late 1990s and early 2000s, and their impact on banks’ business models. We show that banks have not played their envisaged role in financing structural transformation via industrial growth and economic development. Yet, drawing on evidence from Malaysia and Nigeria, our discussion highlights that (large) banks in DEEs have attained considerable structural power over financial policy. In turn, this power supports their ability to shape growth and investment strategies. On the basis of our findings, we argue that the traditional model of the structural power of finance needs to be revised to better recognize its contingent nature at a time of heightened financialization - in terms of its sources, context and implications. States pursue various forms of financialization both as a substitute to, or in conjunction with, industrial policy. As this article demonstrates, financialized development strategies enhance the structural power of large banks in DEEs, notwithstanding their limited role in meeting the investment/development imperative.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance |
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| Divisions: | Faculty of Social Sciences > Politics and International Studies | ||||||||
| Library of Congress Subject Headings (LCSH): | Banks and banking -- Developing countries, Banks and banking, International, Financial planning industry , Economic assistance , International finance, Financialization | ||||||||
| Journal or Publication Title: | Politics & Society | ||||||||
| Publisher: | Sage Publications, Inc. | ||||||||
| ISSN: | 0032-3292 | ||||||||
| Official Date: | December 2022 | ||||||||
| Dates: |
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| Volume: | 50 | ||||||||
| Number: | 4 | ||||||||
| Page Range: | pp. 571-598 | ||||||||
| DOI: | 10.1177/00323292221125567 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Open Access (Creative Commons) | ||||||||
| Date of first compliant deposit: | 18 July 2022 | ||||||||
| Date of first compliant Open Access: | 19 July 2022 | ||||||||
| RIOXX Funder/Project Grant: |
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