Journal of Economic Literature
Book Reviews
2026-09-01
Robert E. Wright of New York University reviews “Political Institutions and Financial Development” by Stephen Haber, Douglass C. North, Barry R. Weingast,. The EconLit Abstract of the reviewed work begins “Nine papers examine why some countries develop better financial systems than others, focusing on the importance of a country's political institutions in this development. Papers discuss political institutions and financial development--evidence from the political economy of bank regulation in Mexico and the United States (Stephen Haber); the political economy of early U.S. financial development (Richard Sylla); what the World Bank can learn from American history (John Joseph Wallis); the move beyond legal origin and checks and balances--political credibility, citizen information, and financial sector development (Philip Keefer); the microeconomic effects of different approaches to bank supervision (James R. Barth, Gerard Caprio, and Ross Levine); political drivers of diverging corporate governance patterns (Peter Gourevitch and James Shinn); credible commitment and sovereign default risk--two bond markets and imperial Brazil (William R. Summerhill); legal origin versus the politics of creditor rights--bond markets in Brazil, 1850-2002 (Aldo Musacchio); and economics, political institutions, and financial markets (Douglass C. North and Mary M. Shirley). Haber is A. A. and Jeanne Welch Milligan Professor in the School of Humanities at Stanford University and Senior Fellow of the Hoover Institution. North is Professor of Economics at Washington University in St. Louis and Senior Fellow of the Hoover Institution. Weingast… Index.”