Financial Development and Inclusive Growth : Attaining Shared and Sustainable Prosperity in Egypt

World Bank

Washington, DC

关键词: ACCESS TO BANK;    ACCESS TO BANKS;    ACCESS TO CAPITAL;    ACCOUNTING;    ACCOUNTING STANDARDS;   

RP-ID  :  91880

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Better functioning financial systemsfoster economic growth, poverty alleviation; moreover, amore equitable distribution of economic opportunitiesenhances overall economic development. It is critical thatfinancial development leads to inclusive growth. This bringsus to certain key questions: Who benefits from a betterfinancial system? Does financial development induce anincrease in per capita Gross Domestic Product (GDP) onlybecause the very rich are getting even richer? Does financeexpand economic opportunities for the bulk of society?Economic theory suggests that finance shapes thedistribution of economic opportunities. The financial systemaffects the degree to which a person s economicopportunities are defined. It influences who can launch anew business venture and who cannot, who can acquireeducation and who cannot, who can live in a neighborhoodthat fosters the cognitive and non-cognitive development oftheir children and who cannot, who can pursue one s economicdreams and who cannot. A more competitive, betterfunctioning financial system exerts a disproportionatelypositive impact on relatively low-income families. Accordingto the extent that the financial system performs thesefunctions well, economies tend to grow correspondinglyfaster. For example, when banks screen borrowers effectivelyand identify firms with the most promising prospects, thisis a first step in boosting productivity growth. Whenfinancial markets and institutions mobilize savings fromdisparate households to invest in these promising projects,this represents a second crucial step in fostering economicgrowth. When financial institutions monitor the use ofinvestments after financing firms and scrutinize theirmanagerial performance, this is an additional, essentialingredient in boosting the operational efficiency ofcorporations, reducing waste and fraud, and spurringeconomic inclusivity. There is a robust positiverelationship between financial development and both povertyalleviation and reduction in income inequality. It is notjust that finance accelerates economic growth, whichtrickles down to the poor; rather, finance exerts adisproportionately positive influence on lower incomehouseholds. Building on the finance and poverty connection,there is a direct link between finance and human welfare.When policy reforms foster the development of the financialsystem, financial services improve, accelerating economicgrowth, which ultimately leads to ending extreme poverty andboosting shared prosperity.