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dc.creatorGonzález Vega, Claudioen_US
dc.description.abstractThis paper explores the implications of financial reform for marginal clientele in developing countries. It first surveys increasingly more ambitious attempts at reform, as a consequence of the failure of the old interventionist and protectionist strategies of development. It claims that the role of government has shifted from the control of financial prices and amounts to the preservation of macroeconomic stability and financial system solvency. Financial reform is a necessary but not a sufficient condition for increased access to financial services by marginal clientele. Actually, lack of access is due to a much lesser extent to market failure than to incomplete organization and limited institutional and physical infrastructure. Belief that the observed patterns of interest rates and limited access to formal credit in rural financial markets were due to market failure led, however, to the incorrect design and eventual failure of most small farmer credit programs. The main flaws were a generalized lack of concern for risk and for institutional viability. In addition to new policies and institutional design, however, financial innovations will be required. Local financial institutions may become sources of innovation, but cannot reduce systematic risk sufficiently. The development of financial market systems and networks will be needed in order to overcome the limitations of local intermediaries, both in a micro and a macroeconomic sense.en_US
dc.format.extentPages: 20en_US
dc.publisherOhio State University. Department of Agricultural, Environmental, and Development Economicsen_US
dc.relation.ispartofseriesOhio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 1943en_US
dc.rightsThis item may be protected by copyright, and is made available here for research and educational purposes. The user is responsible for making a final determination of copyright status. If copyright protection applies, permission must be obtained from the copyright holder to reuse, publish, or reproduce the object beyond the bounds of Fair Use or other exemptions to the law.en_US
dc.titleFinancial Reform and Marginal Clientele in Developing Countriesen_US
dc.type.genreWorking Paperen_US

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