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Financial Development, Financial Instability and Poverty Sylviane Guillaumont Jeanneney, CERDI-CNRS-University of Auvergne, CSAE, University of Oxford Kangni Kpodar, CERDI-CNRS-University of Auvergne WPS/2005-09 Download the Paper (PDF format) - October 26, 2005 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: This article investigates how financial development is beneficial to the reduction of poverty, on the one hand by promoting growth and in the other hand directly by the McKinnon conduit effect. At the same time, however, financial instability which accompanies financial development is detrimental to the poor and dampens the positive effect of financial development on the reduction of poverty. These hypotheses are tested successfully on a sample of developing countries over the period 1966-2000, resulting in straightforward policy implications SUGGESTED CITATION: Sylviane Guillaumont Jeanneney and Kangni Kpodar, "Financial Development, Financial Instability and Poverty" (October 26, 2005). The Centre for the Study of African Economies Working Paper Series. Working Paper 243. http://www.bepress.com/csae/paper243