This dissertation aims to explore political determinants of the magnitude and the pace of six dimensions of financial reforms in developing countries. The magnitude of financial reforms refers to the degree a country engages in a larger scale of financial reforms at one time, while the pace of financial reforms refers to the degree to which a country speeds up financial reforms. I argue that the IMF conditionality programs play a role in facilitating a larger magnitude of financial reforms and in speeding up the pace of each of the six dimensions of financial reforms. However, these IMF effects are conditioned by the number of veto players; namely, as the number of veto players increases, these IMF effects tend to decrease. Further, I predict that the stronger the influence of the manufacturing sector in a country, the larger the magnitude of financial reforms and also the quicker the pace of financial reforms for most dimensions, with the dimension of the enhancement of banking supervision as an exception. Also, countries with a stronger influence of the banking sector tend to choose a smaller scale of financial reforms at one time and tend to delay financial reforms.

These arguments were examined both quantitatively and qualitatively. Quantitatively, using the Financial Reform Database developed by the IMF, I examined thirty developing countries’ data from 1973 to 2002. Qualitatively, I employed case study analysis in three countries: Indonesia, Thailand, and Korea. Results demonstrated that the IMF’s impact on financial reforms is contingent upon the number of veto players in both the pace and magnitude of financial reforms as hypothesized. In addition, the effects of the manufacturing sector were confirmed in both quantitative and qualitative analyses, while the effects of the banking sector were confirmed in qualitative analysis.