Law and Banking Development in a South Pacific Island Economy: The Case of Fiji, 1970-2006

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Title Law and Banking Development in a South Pacific Island Economy: The Case of Fiji, 1970-2006
Author Sharma, Parmendra Prakash; Nguyen, Tom
Journal Name Journal of the Asia Pacific Economy
Editor David Lim
Year Published 2010
Place of publication United Kingdom
Publisher Routledge
Abstract This paper examines the applicability of the prominent Law–Finance theory to banking development in Fiji, a representative island economy in the South Pacific region. Secondary and primary data are used to assess legal institutions and the level of development in the banking sector in Fiji (and, where possible, in other South Pacific island economies) in comparison with up to 53 other countries, both developed and developing. The paper also re–examines the question of a possible Law–Banking Development connection internationally, in light of newly available data and a newly proposed composite index of banking development. The results are consistent with previous findings of a direct relationship between law enforcement quality and banking development, but they also suggest that the legal rules codifying creditor rights may not be as influential as had been thought previously. The latter result accords with the experience of Fiji, where very weak legal rules combined with average law enforcement quality (and high accounting standards) yield a reasonable performance in terms of banking development over the 1970–2006 period. The paper also points out some possible policy implications of these results.
Peer Reviewed Yes
Published Yes
Alternative URI http://dx.doi.org/10.1080/13547861003700422
Copyright Statement Copyright 2010 Routledge. This is an electronic version of an article published in Journal of the Asia Pacific Economy Volume 15, Issue 2, 2010, 192-216. Journal of the Asia Pacific Economy is available online at: http://www.informaworld.com with the open URL of your article.
Volume 15
Issue Number 2
Page from 192
Page to 216
ISSN 1354-7860
Date Accessioned 2010-05-04
Language en_AU
Faculty Griffith Business School
Subject Economic Development and Growth; Financial Economics
URI http://hdl.handle.net/10072/32182
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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