FINANCIAL CONSUMER PROTECTION POLICY INDEXES: METHODOLOGY AND RESULTS

Abstract

The article proposes a comprehensive methodology for constructing nine policy indexes on financial consumer protection with a particular emphasis on the regulation of consumer credit markets. The approach relies on a comparative analysis of questions and responses drawn from two global World Bank surveys carried out in 2017 and 2022. Harmonizing the survey instruments across the two waves makes it possible to trace the evolution of financial consumer protection frameworks, measure the extent of regulatory progress over time, and evaluate differences in national approaches to consumer-oriented financial policies.

The indexes are built using structured and thematically grouped sets of questions that capture the core dimensions of financial consumer protection. These dimensions include financial inclusion policies, financial literacy initiatives, disclosure and transparency requirements, regulation of credit costs, principles of fair treatment and responsible lending, effectiveness of dispute resolution mechanisms, credit reporting practices, and the institutional capacity of supervisory authorities. Each index reflects not only the presence of specific regulatory norms but also the degree to which they are implemented in practice.

The proposed methodology enhances cross-country comparability and allows the resulting indexes to be incorporated into broader quantitative analyses, including studies of their relationship with macroeconomic indicators and financial market outcomes. Index values were calculated for 84 countries with sufficiently complete macroeconomic datasets, which enabled robust cross-sectional and temporal comparisons. The findings demonstrate wide variation in regulatory approaches, highlight persistent gaps in the protection of users of financial services, and reveal that progress in strengthening consumer protection policies remains uneven across regions and income groups.