Financial Repression: The Always Presumed Guilt
Ines Andrea Ati

The concept of financial liberalization is propelled by the writings of Mackinnon and Shaw (1973). This concept seems to constitute the remedy to get out of a regime of financial repression. It is at the end of the six decade that these two authors have delivered their first admission of failure of interventionism. They present the liberalization of the financial sector as a simple and effective way to accelerate the economic growth of developing countries. Because of this, the rejection of the interventionism and the passage to the liberal order derived, for proponents of liberalism, of the logical necessities of giving to the economic activity new policies which would allow it to access to levels of growth faster and to achieve a higher efficiency. At the end of 70s, a number of countries in Latin America (Argentina, Chile, and Uruguay) put in place a policy of financial liberalization. Other countries of south-east Asia (South Korea, Taiwan) have adopted this policy at the beginning of 80s. The question that arises is the following: what are the implications of liberalization on the financial sphere and especially on economic growth for the developing countries subscribing in this strategy? To answer this question, we have examined the foundations and implications of financial liberalization in the first section. In the second part of the study, we dealt with the development strategies related to financial liberalization. We discussed the transition from theory to practice through an empirical study in the third section.

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