Is Shareholder Capitalism a Defunct Model for Financing Development?

Shareholder capitalism, and the American system of corporate governance that serves as its operating system, has been held out as a model of economic development for emerging markets for the past generation. This article unpacks the origins of this model within the US and argues that the model has had at best mixed success outside the US. Moreover, the fallout from the two financial bubbles of the early 21st century suggests that shareholder capitalism may not work as advertised even within the US. In the wake of the financial crisis, wise policymakers will draw on a diversity of models rather than hewing to the ‘one best way.’