From limited access to open access: political and economic history of the opening up of US banking industry

LU Qian1

(1.School of Economics, Central University of Finance and Economics)

【Abstract】In history, why have the elites that had monopoly privileges and were protected by a set of economic and political institutions become willing to dismantle those institutions and give up their privileges? This article provides an explanation based on the analysis of the history of banking opening up in the early 19th century in Massachusetts. In regimes with closely interrelated political and economic privileges, political competition among elites leads to instability of bank charters and rent dissipation, forcing bank charters to be extended to all elites. Meanwhile, taxes on bank capital have led to the exemption of property tax of the elites and provided incentives for bank charters. When benefits of opening up bank access overweigh those of access limitation, the elites would become willing to agree to extend banking privileges to ordinary citizens.

【Keywords】 opening up of the banking industry; elites; political competition; limited access; open access;

【DOI】

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    Footnote

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This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 05, Pages 104-118+7

September 2018

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Abstract

  • 1 Theoretical framework
  • 2 From limited access to open access: a case study of Massachusetts banking industry
  • 3 From limited access to open access
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