March 3, 2026Open Access

Bayesian Versus Classical Perspectives: Does Financial Inclusion Truly Drive Economic Growth?

Key Points

Significant positive effect of financial inclusion on economic growth was confirmed by both Bayesian and classical approaches.
The classical effect size was 0.682, while the Bayesian estimate was slightly lower at 0.616, both indicating strong relationships.
Meta-analysis utilized both classical random-effects and Bayesian hierarchical models, revealing substantial heterogeneity in findings.
The substantial heterogeneity suggests that impacts of financial inclusion are context-dependent, emphasizing the need for tailored policies.

Abstract

Objectives : This study synthesizes quantitative evidence on the relationship between financial inclusion (FI) and economic growth (EG) to estimate the overall effect size, comparing classical (frequentist) and Bayesian meta-analytic approaches to understand how methodological choices influence the interpretation of the FI-EG nexus. Methods : A meta-analysis of 27 studies was conducted. Effect sizes (Fisher’s z) were pooled using classical random-effects and Bayesian hierarchical models. Heterogeneity was assessed using Cochran’s Q, I², and τ estimators (classical), as well as posterior τ distributions with Bayes factors (Bayesian). Results : Both approaches confirm significant positive FI-EG relationships (classical: 0.682, 95% CI 0.582, 0.782; Bayesian: 0.616, 95% CrI 0.342, 0.824). Substantial heterogeneity was detected (classical τ = 0.076; Bayesian τ = 0.195, BF₁ > 1000), with Bayesian analysis suggesting larger variation magnitude. Conclusion : Financial inclusion has a significant impact on economic growth. However, substantial heterogeneity indicates context-dependent impacts, requiring tailored policies. The Bayesian framework provides a richer characterization of uncertainty, offering more conservative and realistic evidence assessment.

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