This book discusses the relationship between financial liberalization, financial deepening and economic performance from both a theoretical and a policy perspective, comparing several 'big' emerging countries: Argentina, Brazil, China, India, Russia, South Africa and India, amongst others.

Korea's financial development has been a tale of liberalization and opening but the new system has failed to steer the country away from financial crises. This study analyzes the changes in the financial system and finds that financial liberalization has contributed little to grow and stabilize the Korean economy.

Since the beginning of the 1990s, Brazil has followed a pattern of economic development inspired by Washington Consensus. This framework includes a set of liberalising and market friendly policies such as privatisation, trade liberalization, stimulus to foreign direct investment, tax reform, and social security reforms. This book assesses the determinants and impacts of financial liberalisation in Brazil considering its two dimensions: the opening up of the balance of payments capital account, and the penetration by foreign bank of the domestic banking sector. The author combines theoretical and empirical analyses. Some make use of mathematical models and/or statistical techniques; however, they are only used when they are strictly necessary to the analysis.

Since the beginning of the 1990s, Brazil has followed a pattern of economic development inspired by Washington Consensus. This framework includes a set of liberalising and market friendly policies such as privatisation, trade liberalization, stimulus to foreign direct investment, tax reform, and social security reforms. This book assesses the determinants and impacts of financial liberalisation in Brazil considering its two dimensions: the opening up of the balance of payments capital account, and the penetration by foreign bank of the domestic banking sector. The author combines theoretical and empirical analyses. Some make use of mathematical models and/or statistical techniques; however, they are only used when they are strictly necessary to the analysis.

This volume examines the impact on economic performance of structural policies-policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. The results reflect a new dataset covering reforms of domestic product markets, international trade, the domestic financial sector, and the external capital account, in 91 developed and developing countries. Among the key results of this study, the authors find that real and financial reforms (and, in particular, domestic financial liberalization, trade liberalization, and agricultural liberalization) boost income growth. However, growth effects differ significantly across alternative reform sequencing strategies: a trade-before-capital-account strategy achieves better outcomes than the reverse, or even than a "big bang"; also, liberalizing the domestic financial sector together with the external capital account is growth-enhancing, provided the economy is relatively open to international trade. Finally, relatively liberalized domestic financial sectors enhance the economy's resilience, reducing output costs from adverse terms-of-trade and interest-rate shocks; increased credit availability is one of the key mechanisms.

This work examines the effects of financial liberalization of the more advanced economies in Southeast Asia and analyses the degree to which emerging and transitional economies in East and South Asia can benefit from this example.