A cross section analysis of 23 OECD members shows that there is an 'antagonistic' relationship between the legal protection of investor interests on the one hand and labour interests on the other: the stronger the legal protection of investor rights in a country, the less developed are the...

We develop a model of endogenous lobby formation in which wealth inequalityand political accountability undermine entry and financial development. In-cumbents seek a low level of effective investor protection to prevent potentialentrants from raising capital. They succeed because they can...