ABSTRACT
Pawnshops, one of the oldest forms of credit, have not been extensively studied. This chapter shows the complexities of interactions of state, market, and the law since the 1920s in Brazil, Mexico, and Taiwan. These case studies offer a typology of four roles of the state in the pawn brokerage industry in developing markets: (1) The replacement model (Brazil); (2) The absence (free market) model (Mexico); (3) The competition model (Taiwan, until the 1990s); (4) The complementary model (Taiwan, after the 1990s). While the state role is very distinct in each case, we show that today, all three countries have a dual-track arrangement in which pawn brokerages serving more vulnerable populations operate in parallel with for-profit ones. We conclude by exploring some implications of these case studies for the literature on finance, development, and the role of state in the market.
