Why financial inclusion policy and regulation?

This dissertation examines the reasons why low- and middle-income countries adopt financial inclusion policy and regulation. It does so starting with a quantitative model and ending with a comparative case study of the India and Mexico contexts. The quantitative model finds evidence that financial inclusion policy and regulation follows a state's capacity and a state's engagement with international organizations and peer states. The case of Mexico complicates these findings, challenging the causal direction of engagement with international organizations - Mexico uses international organizations both to emphasize the importance of financial inclusion policy and regulation within the country and to champion its position in the international community. The outlier case of India shows the prioritization of social inclusion at its extreme, displaying the role a social inclusion framework played even decades ago in creating a more inclusive banking sector. The dissertation concludes by articulating a road map for future scholarship, building on practitioner and international organization enthusiasm for the topic.