{
  "title": "Financial Development and Poverty Reduction: Can There Be a Benefit Without a Cost?",
  "publication": "IMF Working Papers, March 1, 2008",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/financial-development-and-poverty-reduction-can-there-be-a-benefit-without-a-cost-21734",
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  "summary": "This article investigates how financial development helps to reduce poverty directly through the McKinnon conduit effect and indirectly through economic growth.",
  "sections": [
    {
      "heading": "Research Question and Scope",
      "content": "- Investigates how financial development affects poverty reduction:\n  - Directly through the McKinnon conduit effect.\n  - Indirectly through economic growth.\n- Empirical sample covers developing countries for the period 1966 through 2000."
    },
    {
      "heading": "Key Findings",
      "content": "- The poor benefit from banking-system functions that:\n  - Facilitate transactions.\n  - Provide savings opportunities.\n- The poor \"to some extent fail to reap the benefit from greater availability of credit.\"\n- Financial development is accompanied by financial instability, which is detrimental to the poor.\n- Overall conclusion: \"the benefits of financial development for the poor outweigh the cost.\""
    },
    {
      "heading": "Themes and Evidence",
      "content": "- Direct channel: McKinnon conduit effect — financial development reduces transaction costs and improves saving mechanisms benefiting the poor.\n- Indirect channel: Financial development fosters economic growth, which in turn can reduce poverty.\n- Distributional concern: Greater availability of credit does not fully translate into benefits for the poor.\n- Risk channel: Increased financial development correlates with financial instability that harms the poor."
    },
    {
      "heading": "Subject Areas and Keywords",
      "content": "- Subject: Credit, Financial sector development, Personal income, Poverty, Poverty measurement\n- Keywords: GDP, headcount poverty, poverty gap, WP"
    },
    {
      "heading": "Availability and Formats",
      "content": "- Landing page provides options:\n  - Download PDF\n  - More Formats on IMF eLibrary\n  - Order a Print Copy\n  - Create Citation (Chicago format example shown)\n\nIMF Working Paper: \"Financial Development and Poverty Reduction: Can There Be a Benefit Without a Cost?\" (Guillaumont Jeanneney and Kpodar, March 1, 2008), Working Paper No. 2008/062.\n\n---\n\n Content in this bundle\n\n- wp0862\n  - wp0862 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0862 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/financial-development-and-poverty-reduction-can-there-be-a-benefit-without-a-cost-21734"
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    "[Markdown version](/en/publications/wp/issues/2016/12/31/financial-development-and-poverty-reduction-can-there-be-a-benefit-without-a-cost-21734/index.md)",
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    "Authors: Sylviane Guillaumont Jeanneney, Kangni R Kpodar",
    "Published: March 1, 2008",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451869248.001",
    "Investigates how financial development affects poverty reduction:",
    "Empirical sample covers developing countries for the period 1966 through 2000.",
    "The poor benefit from banking-system functions that:",
    "The poor \"to some extent fail to reap the benefit from greater availability of credit.\"",
    "Financial development is accompanied by financial instability, which is detrimental to the poor.",
    "Overall conclusion: \"the benefits of financial development for the poor outweigh the cost.\"",
    "Direct channel: McKinnon conduit effect — financial development reduces transaction costs and improves saving mechanisms benefiting the poor.",
    "Indirect channel: Financial development fosters economic growth, which in turn can reduce poverty.",
    "Distributional concern: Greater availability of credit does not fully translate into benefits for the poor.",
    "Risk channel: Increased financial development correlates with financial instability that harms the poor.",
    "Subject: Credit, Financial sector development, Personal income, Poverty, Poverty measurement",
    "Keywords: GDP, headcount poverty, poverty gap, WP",
    "Landing page provides options:",
    "**_wp0862**"
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