| Summary: | This thesis attempts to establish a number of relationships between financial growth and economic development and then to analyse financial and real development in Lebanon in the context of these relationships. It is the basic contention of the thesis that the final structure of a country, consisting of a number of financial intermediaries generating financial instruments, can actively influence, if not determine, the course of real economic development in the economy. In part I the analyses presented by Goldsmith, Gurley and Shaw, and McKinnon are examined to see how the relationships between financial growth and economic development have been interpreted by these writers. It is found that even a synthesis of their views does not fully comprehend the complexity of the inter-relationships and some further measures of financial structure are discussed in chapter three. A combination of the views in Part I suggest an approach which is adopted in Part II where financial growth and development are analysed in Lebanon from 1950 to 1974. Part II begins with a detailed analysis of the Lebanese economy with special emphasis being laid on the financial inadequacies of each economic sector. Secondly, in Part II a detailed description of the growth and operation of the financial sector is provided, along with an analysis of monetary control. In Chapter Nine the various strands of the argument are brought together in an attempt to analyse the financial deficiencies of the Lebanese system, particularly with respect to projected growth targets contained in the latest national plan. The situation in the Lebanon is that the total resources of the financial sector are probably sufficient to meet all development requirements, but these requirements are largely long-term in nature, whilst funds deposited in the financial system are short-term in nature. In addition there is a complicating factor in that a large proportion of these funds are denominated in foreign currencies. Thus the total funds within the financial system over-state the extent to which the financial sector is capable of increasing domestic capital formation.
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