Paper Sample on the Facets of Financial Development

Published: 2022-04-01
Paper Sample on the Facets of Financial Development
Type of paper:  Thesis
Categories:  Finance Development
Pages: 7
Wordcount: 1797 words
15 min read


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Throughout the entirety of this project, I would really like to thank my Instructor for this project. He has been very instrumental in his support for me through the entire time when I was doing this project with numerous directions and advice. I would also like to thank my parents who have gone into their resources to sponsor me for the entire course


This paper makes an aim to look into the various facets of financial development. It tests a number of hypotheses in the model of financial development. It seeks to unearth the major determinants of financial development. It does this by making an inquiry into what factors are used to measure development. It also goes ahead to look at the various determinants such as politics. In many countries, politics is one of the major issues that affect the economic development. Looking into such matters help in sealing some of the loopholes that hinder development and lead to retrogressive economies. As a matter of fact, any democratic country has a huge effect attached to it when it comes to the role played by politics in determining economic growth. Issues such as politics may be considered as sensitive, even universal, however, when they are addressed well their effects in the economic development of countries may either be made positive or less negative in terms of the impacts they cause to the possibilities of growing economies. Politics set boundaries for how much an economy can grow interdependently with its neighbors. Additionally, politics may also lead to the development of a hard ground which is hard to break when it comes to bilateral talks. This makes a very complicated situation whereby countries may find themselves struggling a lot in terms of financial growth. Politicians are prominent people in the society, though sometimes they become ambitious and they want their interests reflected in the various decisions made by the government as well as the leading companies in their countries. In addition to that, most decisions key to the financial development of a company is made by politicians. These may be in Parliament or in the executive part of the government. Despite all this, politics can also lead to the financial development of a company is founded on the right foundations. Additionally, it seeks to unearth the various strategies that can be used to ensure that there is economic growth through the political system. This paper is divided into various important parts that address the most important issues to help in understanding the topic of this research. Some of the most important parts include the introduction that gives the background information about the topic. Before one writes about an important topic such as the determinants of economic growth, it is important to put the topic into perspective by stating some of the most important reasons why the topic needs to be addressed through research. It is also important to relate the issues of the determinants of economic growth to the effects they can have in the lives of the members of the public. The determinants of economic development in companies and countries at large lead to dire effects on the common people that presents the problem statement in the current study. The findings look into the various factors that determine the possibilities of pressing economies. The results found in this study is what forms the discussion on the topic and in drawing of references as well as conclusions. To add to that, the recommendations of the study also address the issues that have arisen from the research and can be managed using the findings of the study.


Financial development is one of the most paramount aims of any country on earth (Valickova, Havranek, and Horvath, 2015: p. 510) This is because Financial development is a key determinant to the livelihood of the citizens. As a matter of fact, when politicians go out on campaigns, they promise the electorate with promises of financial development so as to improve their lives. Politics is, therefore, a great determinant of financial development in that it forms the basic rubric of how decisions pertaining to the finance of a nation are made (Valickova, Havranek, and Horvath, 2015: p. 510). Politics carries the day on this topic due to the fact that it majorly forms the basic forms of operation within which a country can move to ensure that there is development.

Despite politics being a constant determinant of financial development in any country, there are also other determinants which may affect a country or an organization internally or externally. Most of the external factors are those that a country has no control over (Omri, et, al., 2015: p.243). Therefore, it can only adjust itself in such a way to align itself with the external environment to ensure it continues to grow financial. Apart from the various determinants of financial growth, there are also measure and parameters to measure economic growth so as to test whether a country is making any progress at all (Valickova, Havranek, and Horvath, 2015: p. 510). Most of these patterns are based on current proceeds of a country per annum. One example of such parameters is the GDP.

While talking about the determinants of financial and economic development in general, it is ignorant not to mention and have a deep discourse on the measures of financial development. This is due to the fact that, they are the major signs checked for to see whether a country is growing financially or it is not. One of the most parameters used to test for financial growth is Gross Domestic Product. This implies to the total production a company makes without putting in the sot that a country has undergone3 to attain the level of growth it has attained over the said period. This is very important in that it helps the country monitor its progress and also come up with measures to test for its growth. Measuring the level of growth enables a country to know whether it is headed in the right direction in terms of growth or not. Then it can make informed decisions towards the direction it would like to take to ensure that there is constant growth for the economy.

For any country desiring to make growth a priority, then there should be a form of model that is used to come up with the country's growth. This way, a country can work towards a particular set goal rather than any direction in which a company may even end up losing sight and walking in the wrong direction. Due to the high increase in competition among nations has led to more and more countries desiring to make progress economically. This is a great shift from the past whereby countries competed in terms of military power. In recent times, there has actually been a surge in the number of countries that are at war with each other in the military front. Rather, the most important factor for every nation has now become the factor of financial muscle. This is because proper economic development also implies that any nation is also able to do proper projects for the country so that the citizenry can enjoy life at a much higher level.


Financial openness has a great connection to financial development. As discussed above, the political climate is at most times the greatest locus points for the growth of any economy. This is because it is through politics that various decisions regarding the economy are made. One such decision is such as the budget. The Budget is formulated by the finance ministry of most democratic countries (Samantha, et., al 2015: p.163). However, there is usually demand from the parliament that the budget either be passed or not. Political tunings in a country may make a budget get approved or not. Therefore, the political framework plays a great role in determining the economy of a country. However, the ability of the politics of a country to have an effect on the financial development relies on the openness of the country. If there is openness in the utilization of funds for financial development then it is possible for the country to experience a great level of growth because they will be able to decide the best political leaders who can drive the economic agenda of a country forward, On the other hand, if at all a country does not have openness then it is possible for the people at the helm of power to spend and embezzle public funds which may consequentially lead a country into great debt or even failure as a country.

The income per capita of the citizens in a country has great influence on the financial sector. This is due to a number of factors. The first part of this factor being that when people have money to then, they also have the power to spend. This will have a direct effect on production by firms in the country which then leads to a great deal of growth in the financial sector (Samantha, et., al 2015: p.163). On the other hand, if people have no money to spend, then it is almost obvious that the financial sector of an economy may sooner or later fall into a pit of unsustainability. This is because as aforementioned, the per capita income of the individuals in a country has a great effect on how they are able to spend their money. This means that if they do not have much, then they are not able to spend much which means that there will be little demand for goods. As a result, there is also low production because there is a low demand for goods in the country. This, therefore, causes a great loss in the growth of a company when there is little production since there also will be no meaningful finances to run the financial agenda of a country forward. A deeper scaled financial sector often has a positive effect on the financial sector of an economy. This is because it brings out all the Nitti gritty of the country which thus enables a country to make a much more informed decision concerning the economy towards the future. A deep scaled financial sector is also important it enables an economy to bring out opportunities that may have previously been hindered and hidden down. This then brings out great promises for any country that desires to grow economically.

Chapter Overview

This chapter discusses the various theoretical frameworks that pertain to financial development and growth of any country. This majorly relates to some of the factors in a country that may be of great importance to the said country. One of the main frameworks is the methods that countries use to grow economically. There are numerous meth...

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