State and finance in the OECD: Previous trends and current change

Politics and Society

Volumn 28, Issue 1, 2000, Pages 35-65

  Verdier, Daniel ^a  

^a NONE

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EID: 0034406396     PISSN: 00323292     EISSN: None     Source Type: Journal    
DOI: 10.1177/0032329200028001003     Document Type: Review

References (61)

1. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA: Belknap, 1962); John Zysman, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca, NY: Cornell University Press, 1983). See also Andrew Shonfield, Modern Capitalism (Oxford, UK: Oxford University Press, 1965) and Y.-S. Hu, "Industrial Banking and Special Credit Institutions: A Comparative Study," Policy Studies Institute No. 632, London (1984).
2. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA: Belknap, 1962); John Zysman, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca, NY: Cornell University Press, 1983). See also Andrew Shonfield, Modern Capitalism (Oxford, UK: Oxford University Press, 1965) and Y.-S. Hu, "Industrial Banking and Special Credit Institutions: A Comparative Study," Policy Studies Institute No. 632, London (1984).
3. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA: Belknap, 1962); John Zysman, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca, NY: Cornell University Press, 1983). See also Andrew Shonfield, Modern Capitalism (Oxford, UK: Oxford University Press, 1965) and Y.-S. Hu, "Industrial Banking and Special Credit Institutions: A Comparative Study," Policy Studies Institute No. 632, London (1984).
4. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA: Belknap, 1962); John Zysman, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca, NY: Cornell University Press, 1983). See also Andrew Shonfield, Modern Capitalism (Oxford, UK: Oxford University Press, 1965) and Y.-S. Hu, "Industrial Banking and Special Credit Institutions: A Comparative Study," Policy Studies Institute No. 632, London (1984).
5. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
6. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
7. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
8. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
9. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
10. For OECD countries, see Michael Loriaux, France After Hegemony: International Change and Financial Reform (Ithaca, NY: Cornell University Press, 1991) and Sofia A. Pérez, Banking on Privilege: The Politics of Spanish Financial Reform (Ithaca, NY: Cornell University Press, 1997). On Japan and emergent markets, see Kent E. Calder, Strategic Corporatism: Private Business and Public Purpose in Japanese Industrial Finance (Princeton, NJ: Princeton University Press, 1993); S. Haggard and C. H. Lee, "Introduction: Issues and findings," in S. Haggard and C. H. Lee, eds., Financial Systems and Economic Policy in Developing Countries (Ithaca, NY: Cornell University Press, 1995), 1-30; Sylvia Maxfield, Governing Capital: International Finance and Mexican Politics (Ithaca, NY: Cornell University Press, 1990); and J. -E. Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991).
11. Richard E. Deeg, Finance Capitalism Unveiled: Banks and the German Political Economy (Ann Arbor: University of Michigan Press, 1998).
12. For an application of this argument to the nineteenth century, see Daniel Verdier, "Domestic Responses to Capital Market Internationalization under the Gold Standard, 1870-1914," International Organization 52, no. 1 (1998): 1-34.
13. These ideas are developed in Daniel Verdier, "The Rise and Fall of State Banking in OECD Countries," Comparative Political Studies; forthcoming.
14. See Mitchell A. Petersen and Raghuram G. Rajan, "The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance 49, no. 1 (1994): 3-37, and Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections and Economic Development in Industrial New England (New York: Cambridge University Press, 1994).
15. See Mitchell A. Petersen and Raghuram G. Rajan, "The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance 49, no. 1 (1994): 3-37, and Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections and Economic Development in Industrial New England (New York: Cambridge University Press, 1994).
16. See also Douglas W. Diamond, "Financial Intermediation and Delegated Monitoring," Review of Economic Studies 51, no. 166 (1984): 393-414; Charles W. Calomiris, "The Costs of Rejecting Universal Banking: American Finance in the German Mirror, 1870-1914," in Naomi R. Lamoreaux and Daniel M. G. Raff, eds., Coordination and Information: Historical Perspectives on the Organization of Enterprise (Chicago: University of Chicago Press, 1995), 257-315; and Timothy W. Guinnane, "Diversification, Liquidity, and Supervision for Small Financial Institutions: Nineteenth-Century German Credit Cooperatives," Economic Growth Center, Yale University, Center Discussion Paper No. 733 (October 1995).
17. See also Douglas W. Diamond, "Financial Intermediation and Delegated Monitoring," Review of Economic Studies 51, no. 166 (1984): 393-414; Charles W. Calomiris, "The Costs of Rejecting Universal Banking: American Finance in the German Mirror, 1870-1914," in Naomi R. Lamoreaux and Daniel M. G. Raff, eds., Coordination and Information: Historical Perspectives on the Organization of Enterprise (Chicago: University of Chicago Press, 1995), 257-315; and Timothy W. Guinnane, "Diversification, Liquidity, and Supervision for Small Financial Institutions: Nineteenth-Century German Credit Cooperatives," Economic Growth Center, Yale University, Center Discussion Paper No. 733 (October 1995).
18. See also Douglas W. Diamond, "Financial Intermediation and Delegated Monitoring," Review of Economic Studies 51, no. 166 (1984): 393-414; Charles W. Calomiris, "The Costs of Rejecting Universal Banking: American Finance in the German Mirror, 1870-1914," in Naomi R. Lamoreaux and Daniel M. G. Raff, eds., Coordination and Information: Historical Perspectives on the Organization of Enterprise (Chicago: University of Chicago Press, 1995), 257-315; and Timothy W. Guinnane, "Diversification, Liquidity, and Supervision for Small Financial Institutions: Nineteenth-Century German Credit Cooperatives," Economic Growth Center, Yale University, Center Discussion Paper No. 733 (October 1995).
19. Mitchell A. Petersen and Raghuram G. Rajan, "The Effect of Credit Market Competition on Lending Relationships," Quarterly Journal of Economics 110, no. 2 (1995): 407-43.
20. See Alessandro Polsi, Il mercato del credito a Piacenza (Piacenza: Banca di Piacenza, 1997).
21. Verdier, "The Rise and Fall of State Banking."
22. See Gerhard Lehmbruch, "Liberal Corporatism and Party Government," in P. C. Schmitter and G. Lehmbruch, eds., Trend Toward Corporatist Intermediation (London: Sage, 1979), 147-84; Philip C. Schmitter, "Interest Intermediation and Regimes Governability: Contemporary Western Europe and North America," in Suzanne Berger, ed., Organizing Interests in Western Europe (Cambridge, UK: Cambridge University Press, 1981), 287-330; and Lars Calmfors and John Driffill, "Bargaining Structure, Corporatism and Macroeconomic Performance," Economic Policy (April 1988): 14-61.
23. See Gerhard Lehmbruch, "Liberal Corporatism and Party Government," in P. C. Schmitter and G. Lehmbruch, eds., Trend Toward Corporatist Intermediation (London: Sage, 1979), 147-84; Philip C. Schmitter, "Interest Intermediation and Regimes Governability: Contemporary Western Europe and North America," in Suzanne Berger, ed., Organizing Interests in Western Europe (Cambridge, UK: Cambridge University Press, 1981), 287-330; and Lars Calmfors and John Driffill, "Bargaining Structure, Corporatism and Macroeconomic Performance," Economic Policy (April 1988): 14-61.
24. See Gerhard Lehmbruch, "Liberal Corporatism and Party Government," in P. C. Schmitter and G. Lehmbruch, eds., Trend Toward Corporatist Intermediation (London: Sage, 1979), 147-84; Philip C. Schmitter, "Interest Intermediation and Regimes Governability: Contemporary Western Europe and North America," in Suzanne Berger, ed., Organizing Interests in Western Europe (Cambridge, UK: Cambridge University Press, 1981), 287-330; and Lars Calmfors and John Driffill, "Bargaining Structure, Corporatism and Macroeconomic Performance," Economic Policy (April 1988): 14-61.
25. See Eric Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY: Cornell University Press, 1994), 88, 93. The Euromarkets became especially important in the recycling of the petrodollars following the oil shocks of the 1970s.
26. See David Green, "Pensions, Class and Capital: An International Perspective," Review of Radical Political Economics 29, no. 3 (1997): 144-55; Philip Davis, Pension Funds: Retirement-Income Security and Capital Markets: An International Perspective (Oxford, UK: Clarendon, 1995). For data on households' financial holdings covering seven OECD countries for the period 1976-1990, see Tad Rybczynski, "The Development of European Capital Markets: The Main Trends and Their Implications," in Jack Revell, ed., The Changing Face of European Banks and Securities Market (New York: St. Martin's, 1994), 206-28 at 215.
27. See David Green, "Pensions, Class and Capital: An International Perspective," Review of Radical Political Economics 29, no. 3 (1997): 144-55; Philip Davis, Pension Funds: Retirement-Income Security and Capital Markets: An International Perspective (Oxford, UK: Clarendon, 1995). For data on households' financial holdings covering seven OECD countries for the period 1976-1990, see Tad Rybczynski, "The Development of European Capital Markets: The Main Trends and Their Implications," in Jack Revell, ed., The Changing Face of European Banks and Securities Market (New York: St. Martin's, 1994), 206-28 at 215.
28. See David Green, "Pensions, Class and Capital: An International Perspective," Review of Radical Political Economics 29, no. 3 (1997): 144-55; Philip Davis, Pension Funds: Retirement-Income Security and Capital Markets: An International Perspective (Oxford, UK: Clarendon, 1995). For data on households' financial holdings covering seven OECD countries for the period 1976-1990, see Tad Rybczynski, "The Development of European Capital Markets: The Main Trends and Their Implications," in Jack Revell, ed., The Changing Face of European Banks and Securities Market (New York: St. Martin's, 1994), 206-28 at 215.
29. On the United States, see Wolfgang H. Reinicke, Banking, Politics and Global Finance: American Commercial Banks and Regulatory Change, 1980-1990 (Aldershot, UK: Edward Elgar, 1995).
30. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
31. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
32. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
33. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
34. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
35. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
36. The conflicts of interests surrounding each "Big Bang" are chronicled, for Britain, by Michael Moran, "The State and the Financial Services Revolution: A Comparative Analysis," in Wolfgang C. Müller and Vincent Wright, eds., The State in Western Europe: Retreat or Redefinition? (Portland, OR: Frank Cass, 1994), 158-77; for Japan, by Jennifer Holt Dwyer, "The Dynamics of Financial Market Reform in Japan 1975-95," in Geoffrey R. D. Underhill, ed., The New World Order in International Finance (New York: St. Martin's, 1997), 195-221 ; for the United States, by Andrew C. Sobel, Domestic Choices, International Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor: University of Michigan Press, 1994); for Canada, by Stephen L. Harris, "The Politics of Financial Services Liberalization: The Case of the Canadian Investment Dealer Industry" (paper prepared for the annual meeting of the APSA, San Francisco, September 1996); for Australia, by Robert Ackland and Ian R. Harper, "Financial Deregulation in Australia: Boon or Bane?" in Peter J. Forsyth, ed., Microeconomic Reform in Australia (St. Leonards, Australia: Allen & Unwin, 1992), 45-71; for France, by Philip G. Cerny, "The 'Little Big Bang' in Paris: Financial Market Deregulation in a Dirigiste System," European Journal of Political Research 17 (1989): 169-92; and for Germany, by Susanne Lutz, "The Revival of the Nation-State? Stock Exchange Regulation in an Era of Internationalized Financial Markets," Max Planck-Institut für Gesellschaftsforschung, Discussion Paper No. 96/9 (1996).
37. I also tried Dennis Quinn's measure of nominal openness - a qualitative coding of the degree of openness of a country on the basis of its exchange control regulation - but found no relation with banks' market shares. Nominal openness is not a good proxy for actual flows, which is what I am interested in here; see Dennis P. Quinn, "The Correlates of Change in International Financial Regulation," American Political Science Review 91, no. 3 (1997): 531-52.
38. Cross-country variations in retained earnings usually reflect variations in firms profit strategy, in turn influenced by variations in tax treatment and ownership - insiders are generally more likely to plow the profits back into the company than outsiders.
39. I am not arguing that OECD bank profits have actually declined as a result of globalization - they did throughout the 1980s and then recovered in the 1990s - but that banks must change their financing and investment strategy to maintain past profit margins.
40. Tony Porter, States, Markets and Regimes in Global Finance (New York: St. Martin's, 1993), 93.
41. For instance, Deutsche Bank acquired Morgan-Grenfell and Bankers Trust, Dresdner acquired Kleinwort-Benson, Commerz acquired Hambro, ING acquired Barings SPC acquired Warburg, and Crédit Suisse acquired First Boston.
42. On the securitization of bank loans, see John K. Thompson, Securitisation: An international Perspective (Paris: OECD, 1995).
43. For econometric evidence that the process of deregulation in OECD countries over tne 1981-1990 period has increased banking concentration, see Vittoria Cerasi "An Empirical Analysis of Banking Concentration," Working Paper No. 96.04-luglio, Dipartimento di Economia Politica e Aziendale, Universita degli Studi di Minalo, Milano (1996). Cerasi argues that tougher competition leads to lower profits, driving many financial firms out of the industry and thus increasing concentration.
44. See Anthony Smith, International Financial Markets: The Performance of Britain and Its Rivals (Cambridge, UK: Cambridge University Press, 1992), 137.
45. See Porter, States, Markets and Regimes, 69. There are exceptions, involving U.S. public-employee funds; see Davis, Pension Funds, 192.
46. See Porter, States, Markets and Regimes, 69. There are exceptions, involving U.S. public-employee funds; see Davis, Pension Funds, 192.
47. In the BACH data bank; see European Commission, European Economy, Supplement A, no. 7 (July 1997), 29. The OECD data bank does not differentiate companies by size.
48. Ibid., 24.
49. Hence, net profit ratio has consistently been higher in the United States over the 1984-1993 period than in Europe or in Japan; ibid., 24.
50. On Japan, see Steven M. Fries, "Japanese Banks and the Asset Price 'Bubble'" IMF Working Paper No. 93/85, International Monetary Fund (1993), 9; T. J. Pempel, "Structural Gaiatsu: International Finance and Political Change in Japan" (paper prepared for the annual meeting of the American Political Science Association, Boston, September 1998), 23. On Germany, see Charles F. Sabel, John R. Griffin, and Richard E. Deeg, "Making Money Talk: Towards a New Debtor-Creditor Relation in German Banking" (paper presented at the Conference on Relational Investing, Center for Law and Economic Studies, Columbia University School of Law, May 1993), 23. On France, see Bernard Ganne France: Behind Small and Medium-Size Enterprises Lies the State," in Arnaldo Bagnasco and Charles F. Sabel, eds., Small and Medium-Size Enterprises (London: Pinter, 1995) 115-33. On Italy, see Francesco Cesarini, "The Relationship between Banks and Firms in Italy: A Banker's View," Review of Economic Conditions in Italy 48, no. 1 (1994): 29-50 at 45.
51. On Japan, see Steven M. Fries, "Japanese Banks and the Asset Price 'Bubble'" IMF Working Paper No. 93/85, International Monetary Fund (1993), 9; T. J. Pempel, "Structural Gaiatsu: International Finance and Political Change in Japan" (paper prepared for the annual meeting of the American Political Science Association, Boston, September 1998), 23. On Germany, see Charles F. Sabel, John R. Griffin, and Richard E. Deeg, "Making Money Talk: Towards a New Debtor-Creditor Relation in German Banking" (paper presented at the Conference on Relational Investing, Center for Law and Economic Studies, Columbia University School of Law, May 1993), 23. On France, see Bernard Ganne France: Behind Small and Medium-Size Enterprises Lies the State," in Arnaldo Bagnasco and Charles F. Sabel, eds., Small and Medium-Size Enterprises (London: Pinter, 1995) 115-33. On Italy, see Francesco Cesarini, "The Relationship between Banks and Firms in Italy: A Banker's View," Review of Economic Conditions in Italy 48, no. 1 (1994): 29-50 at 45.
52. On Japan, see Steven M. Fries, "Japanese Banks and the Asset Price 'Bubble'" IMF Working Paper No. 93/85, International Monetary Fund (1993), 9; T. J. Pempel, "Structural Gaiatsu: International Finance and Political Change in Japan" (paper prepared for the annual meeting of the American Political Science Association, Boston, September 1998), 23. On Germany, see Charles F. Sabel, John R. Griffin, and Richard E. Deeg, "Making Money Talk: Towards a New Debtor-Creditor Relation in German Banking" (paper presented at the Conference on Relational Investing, Center for Law and Economic Studies, Columbia University School of Law, May 1993), 23. On France, see Bernard Ganne France: Behind Small and Medium-Size Enterprises Lies the State," in Arnaldo Bagnasco and Charles F. Sabel, eds., Small and Medium-Size Enterprises (London: Pinter, 1995) 115-33. On Italy, see Francesco Cesarini, "The Relationship between Banks and Firms in Italy: A Banker's View," Review of Economic Conditions in Italy 48, no. 1 (1994): 29-50 at 45.
53. On Japan, see Steven M. Fries, "Japanese Banks and the Asset Price 'Bubble'" IMF Working Paper No. 93/85, International Monetary Fund (1993), 9; T. J. Pempel, "Structural Gaiatsu: International Finance and Political Change in Japan" (paper prepared for the annual meeting of the American Political Science Association, Boston, September 1998), 23. On Germany, see Charles F. Sabel, John R. Griffin, and Richard E. Deeg, "Making Money Talk: Towards a New Debtor-Creditor Relation in German Banking" (paper presented at the Conference on Relational Investing, Center for Law and Economic Studies, Columbia University School of Law, May 1993), 23. On France, see Bernard Ganne France: Behind Small and Medium-Size Enterprises Lies the State," in Arnaldo Bagnasco and Charles F. Sabel, eds., Small and Medium-Size Enterprises (London: Pinter, 1995) 115-33. On Italy, see Francesco Cesarini, "The Relationship between Banks and Firms in Italy: A Banker's View," Review of Economic Conditions in Italy 48, no. 1 (1994): 29-50 at 45.
54. On Japan, see Steven M. Fries, "Japanese Banks and the Asset Price 'Bubble'" IMF Working Paper No. 93/85, International Monetary Fund (1993), 9; T. J. Pempel, "Structural Gaiatsu: International Finance and Political Change in Japan" (paper prepared for the annual meeting of the American Political Science Association, Boston, September 1998), 23. On Germany, see Charles F. Sabel, John R. Griffin, and Richard E. Deeg, "Making Money Talk: Towards a New Debtor-Creditor Relation in German Banking" (paper presented at the Conference on Relational Investing, Center for Law and Economic Studies, Columbia University School of Law, May 1993), 23. On France, see Bernard Ganne France: Behind Small and Medium-Size Enterprises Lies the State," in Arnaldo Bagnasco and Charles F. Sabel, eds., Small and Medium-Size Enterprises (London: Pinter, 1995) 115-33. On Italy, see Francesco Cesarini, "The Relationship between Banks and Firms in Italy: A Banker's View," Review of Economic Conditions in Italy 48, no. 1 (1994): 29-50 at 45.
55. Burkhard Drees and Ceyla Pazarbasioglu, "The Nordic Banking Crises: Pitfalls in Financial Liberalization?" IMF Working Paper No. 95/61, International Monetary Fund (1995), 18.
56. Other conceivable blocking positions include the maintenance of the favorable tax treatment of debt against equity financing, the defense of the state-run social security system against the encroachment of private pension plans, the protection by law of company secrecy to the effect of maintaining banks' comparative advantage over markets as a source of finance, and the maintenance of laws ensuring close bank-firm relations (e.g., laws recognizing creditors a say in management).
57. On the role of the courts in the gradual sidestepping of the Glass-Steagall ban, see Reinicke, Banking, Politics, 102. On the more general role of the European Court of Justice in fostering "competitive regulation" between EU members, see Fritz W. Scharpf "Negative and Positive Integration in the Political Economy of European Welfare States," in Gary Marks, Fritz W. Scharpf, Philippe C. Schmitter, and Wolfgang Streeck, eds., Governance in the European Union (London: Sage, 1996), 15-39.
58. On the role of the courts in the gradual sidestepping of the Glass-Steagall ban, see Reinicke, Banking, Politics, 102. On the more general role of the European Court of Justice in fostering "competitive regulation" between EU members, see Fritz W. Scharpf "Negative and Positive Integration in the Political Economy of European Welfare States," in Gary Marks, Fritz W. Scharpf, Philippe C. Schmitter, and Wolfgang Streeck, eds., Governance in the European Union (London: Sage, 1996), 15-39.
59. The greater market orientation of Anglo-Saxon countries is a stylized fact without a good analytical rationale. Among existing explanations, perhaps the most convincing one is the legal origin hypothesis - the notion that common law offers greater investor protection against expropriation by insiders than civil law. See Rafael La Porta, Florencio Lopez-De-Silanes, Andrei Shleifer, and Robert Vishny, "Legal Determinants of External Finance," Journal of Finance 52, no. 3 (July 1997): 1131-50.
60. See Kenneth A. Bollen and Robert Jackman, "Regression Diagnostics: An Expository Treatment of Outliers and Influential Cases," in John Fox and J. Scott Long, eds., Modern Methods of Data Analysis (Newbury Park, CA: Sage, 1994), 257-91.
61. 4 plus twice the covariance between these two parameters. These quantities can all be obtained from the variance-covariance matrix of the parameter estimates.