Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236673 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9131
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
We first present a simple model of post-crisis policymaking driven by both public and private interests. Using a novel dataset covering 94 countries between 1973 and 2015, we then establish that financial crises can lead to government interventions in financial markets. Consistent with a public interest channel, we find post-crisis interventions occur only in democratic countries. However, by using a plausibly exogenous setting -i.e., term limits- muting political accountability, we show that democratic leaders who do not have re-election concerns are substantially more likely to intervene in financial markets after crises, in ways that may promote (obstruct) private (public) interests.
Subjects: 
financial crises
reform reversals
democracies
term-limits
special-interest groups
JEL: 
G01
G28
P11
P16
Document Type: 
Working Paper
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