Template-type: ReDIF-Paper 1.0
Author-Name: Donato Masciandaro
Title: Politicians, Trust, Financial Literacy and Financial Education: When Do Politicians Care?
Abstract: Politicians can be more or less active in pursuing financial education policies in order to strength the financial literacy of the citizens, and consequently their trust. This paper explores the role of financial education policy in modifying the financial-trust endowment of a given population taking the political cost-benefit analysis into account. As, in any period, each incumbent government can design and implement its own financial education policy and as financial-literacy deficits are more likely in a period of financial innovation, we assume that constituencies more or l ess in favour of such policies are present in a given country. If this is the case, we can show that, in a democracy with political competition, the level of activism in implementing financial education policies is positively associated with financial-instability risks, literacy benefits, and illiteracy costs. Moreover, preferences and constraints motivate the politician in charge. More specifically, a more longer time horizons, lower psychological attitudes towards the status quo, and a higher probability of re-election can increase financial-literacy efforts.
Classification-JEL:  D72, G28, G53, H10, K00
Keywords: financial literacy, financial education, financial trust, fintech, financial crisis, loss aversion, political competition 
Length: 15
Number: 23208
Creation-Date: 2023
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp23208.pdf
File-Format: application/pdf
File-Size: 
Handle: RePEc:baf:cbafwp:cbafwp23208