This paper examines whether democratic transition promotes financial development using a panel dataset of 48 events of democratic transition over 1960–2010. In this paper, we offer a first assessment of the results on probably the most important political change, namely transition from an autocratic regime to a democratic one. We include in our estimations control variables as well as the duration of the democratic experience. The preliminary evidence by a “before-and-after” approach indicates that in general democratic transitions are followed by a long-run boost in financial development. The results indicate that on the short term, there is no favourable impact of democratic transition, since financial development is not the priority of the country other political and social stakes override. However, on the long run, the move to a democratic system has a positive effect, as a democratic political process dilutes the degree of elite control over economic resources. Key word: Banking/Financial Intermediation JEL classification: G18, G28, P48 (*) E-Mail address: abdelkader.boudriga@fulbrightmail.org (**)E-Mail address: wafa.ghardallou@gmail.com