This survey reviews the literature on the political economy of financial structure, broadly defined to include the size of capital markets and banking systems as well as the distribution of access to external finance across firms.The theoretical literature on the institutional basis for...

Economists have long maintained that a well-developed and functioning financial system is a vital prerequisite to economic growth. Countries with robust banking sectors and securities markets-that is, countries in which credit cards, loans, mortgages, and the ability to issue stocks and bonds...