Does democracy foster financial development? An empirical analysis

This paper examines whether democracy promotes financial development. While cross-section results show a positive association between democracy and bank development, this relationship disappears in panel regressions. The data also reveals that democracy is not positively related to stock market development.

► This paper examines whether democracy promotes financial development. ► There is a positive association between democracy and bank development. ► This relationship disappears in panel regressions. ► Democracy is not positively related to stock market development.