Reaching out to the unbanked: The role of political ideology in financial inclusion

Abe de Jong*, Abu Zafar Shahriar, Farhan Shazia

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    6 Citations (Scopus)
    131 Downloads (Pure)

    Abstract

    This paper studies the effect of political ideology on household financial inclusion. Financial inclusion is the access to formal financial services and provides an entry key for people to participate in the economy. Using granular data of 65 countries, we find that financial inclusion is higher under right-wing regimes than under left-wing governments. We use regression discontinuity design and propensity-score matching to address endogeneity issues. We investigate multiple channels for the effect and conclude that right-wing market-oriented policies are more successful in enhancing financial inclusion than left-wing societal policies.

    Original languageEnglish
    Article number102678
    Number of pages27
    JournalJournal of International Money and Finance
    Volume126
    DOIs
    Publication statusPublished - Sept-2022

    Keywords

    • Financial inclusion
    • Government ideology
    • Mobile banking
    • Political ideology

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