Political Economy of Financial Systems: Korean and Indian Experiences in Retrospect

As the world grapples with financial instability caused by a massive infusion of pandemic-era liquidity and its subsequent withdrawal, scholars are raising doubts again regarding the merits behind the unhindered push for liberalization and deregulation. In the search for a convincing way out from recurring financial turbulences, this book revisits the past experiences of financial stability presided over by long-term credit supply largely through bank-based intermediation. The two Asian countries, South Korea and India, instituted wide-ranging financial repression through an identical 'Credit based, Price-administered System' but surprisingly they witnessed contrasting outcomes. While accounting for the yawning performance gap between India and South Korea, this book introduces a political economy approach to better understand the efficiency of financial systems. It argues that the 'Functional Efficiency' of finance is not solely dependent on the structures of finance alone but it also lies in the wider political-economic context and its relations with the market. See more