79 research outputs found
Sustaining open capital accounts: international norms and domestic institutions: a comparison between Peru and Colombia
Financial liberalization programs have been adopted by many countries in Latin
America during the past twenty years. Opening the economy to inflows and outflows of
capital – ‘opening the capital account’ – has been a key part of these programs. Many
economists have heralded capital account liberalization as a ‘fast track’ to economic
growth and efficiency in developing countries, partly due to the way that it tightens the
constraints on governments and disciplines them to avoid ‘bad’ policies. Others,
however, have emphasized the dangers of capital account openness, such as its close
relationship with financial crises and the substantial risks it poses for macroeconomic
stability.
While some governments have sustained the opening of their capital account over
decades, others have reversed course after only a short time. The existing literature has
focused on the adoption of capital account liberalization, but has neglected to consider
the reasons for its durability or fragility. My dissertation addresses the question of why
different countries have sustained their opening of the capital account to different
degrees and for different periods. The central argument is that the sustainability of
capital account openness is determined by domestic informal institutions. By informal
institutions I refer to the shared understandings or rules among a country’s
policymaking and business elites about legitimate economic policies. Whether capital
account openness is sustained over time depends on the extent of domestic agreement as
to whether capital controls continue to be effective and legitimate, or whether they have
lost their effectiveness and legitimacy as instruments of macroeconomic policymaking.
Not only is my dissertation the first study of the sustainability of capital account
openness, it is the first to emphasize the importance of informal institutions as distinct
from formal ones.
The next question refers to the factors that determine the content of domestic informal
institutions, such that they favor capital account openness in some countries, and are
much more equivocal in others. My answer emphasizes the legacy of pre-liberalization
state-business relations. Capital account openness is unlikely to be sustained over time
if the export-oriented sector of the economy – concerned about a stable and competitive
exchange rate – preserves its leverage over national policymaking. Conversely, capital
account openness tends to become a durable policy if economic actors benefitting from
capital mobility and largely unaffected by exchange-rate issues dominate state-business
relations.
After the introduction, Chapter 2 describes the essential elements of capital account
policy and explains the methodological approach of the dissertation. Chapter 3 provides
an overview of the literature to explain capital account policy. It distinguishes between
interest-based, institutionalist, and ideas-based approaches located at different levels of
analysis. This review highlights a notable gap in the literature. Analyses of the role of
informal institutions at the domestic level are conspicuously lacking. My dissertation
seeks to fill this analytical lacuna.
Chapter 4 analyzes the international campaign for capital freedom, personified by the
International Monetary Fund. How did the push for capital account liberalization come
into being at the international level, and how has the capital account policy discourse
within the IMF evolved until the present time? Ultimately, the attempt to transform capital freedom into an international norm was not successful. The effects of the Asian
financial crisis in 1997-98 within and outside the IMF undermined the international
norm campaign, symbolized by the failure of the attempt to change the IMF’s Articles
of Agreement in order to give the organization the legal mandate over member-states’
capital account policies. However, the IMF still subscribes to the idea that the free
movement of capital is a desirable policy for all countries.
Yet country responses have been very different. Chapters 5 and 6 examine the link
between IMF prescriptions and domestic policy outcomes, fleshing out the central
argument with case studies of Peru and Colombia, respectively, in the time period from
1990 to the present day. Both countries shared similar economic challenges, a national
community of elite economists convinced of free-market principles, and outside
pressure from the IMF. At the start of the liberalization period in the early 1990s, both
switched from a largely closed to a largely open capital account. However, due to the
effect of different informal institutions based on different state-business relations, Peru
and Colombia then followed different paths. The two cases serve to illustrate that, in the
broader context of financial liberalization, socially shared understandings about
legitimate economic policies reinforce or constrain the impact of international norms,
thus making – or breaking – attempts at economic reform.
Scholars interested in explaining the sustainability of neoliberal economic reforms and
the impact of international norms and ideas on domestic policy choices ignore the role
of domestic informal institutions at their peril. Traditional approaches focused on
material interests, formal political and economic institutions, and global norms and
ideas fail to account for the variation of capital account policy in an age of mobile
capital. Paying heed to the change and continuity of shared understandings about
legitimate economic policies is key to understanding both the influence of international
norms on domestic policy, and the durability or fragility of economic reforms. In order
to become institutionalized in the domestic political economy, international norms
setting out to diffuse free-market policies must encounter a social context in which
alternative development strategies have lost their legitimacy
Entrepreneurial Activity and Civil War in Colombia: Exploring the Mutual Determinants between Armed Conflict and the Private Sector
TAs elsewhere, the Colombian private sector has been accused of promoting or profiting from violence in the country. However, the private sector’s role in the armed conflict and the impact of conflict on entrepreneurial activity vary, as reflected by differences in political activism, in peacebuilding strategies and in costs endured according to company size, sector, and region of operations. At the same time, accounts of regional variation in conflict intensity suggest that an understanding of the Colombian confrontation requires a subnational approach. This paper explores whether and how differences in regional armed armed conflict can be attributed to differences in entrepreneurial make-up and activity associated with five natural resources, produced in different regions (oil, coffee, bananas, emeralds, and flowers). This paper suggests that company-specific traits, institutions of production, and the nature of international markets have a significant impact on the link between entrepreneurial activity and armed conflict in Colombian regions.Colombia, armed conflict, entrepreneurship, private sector, natural resources, multinational companies
20 years since the fall of the Berlin Wall
Hace veinte años era un adolescente en último año de bachillerato en Leipzig, la segunda ciudad más grande de Alemania Oriental, a unos 150 kilómetros al sur de Berlín. Pasé mi niñez y cursé mi educación preuniversitaria en la República Democrática Alemana; en otras palabras, detrás de la llamada “Cortina de Hierro”. Mi educación estuvo dominada por la ideología socialista y fuertemente controlada por el Partido Comunista. El currículum presentaba una interpretación restringida de la historia a través del lente teórico del marxismo-leninismo. Materias como “Staatsbürgerkunde”, literalmente “currículum ciudadano”, tenían como fin implantar el dogma comunista en los cerebros de los estudiantes. Viéndolo desde el exterior, Alemania Oriental debió de haberse visto como la realización de la visión de George Orwell en 1984
20 años de la caída del Muro de Berlín
Hace veinte años era un adolescente en último año de bachillerato en Leipzig, la segunda ciudad más grande de Alemania Oriental, a unos 150 kilómetros al sur de Berlín. Pasé mi niñez y cursé mi educación preuniversitaria en la República Democrática Alemana; en otras palabras, detrás de la llamada “Cortina de Hierro”. Mi educación estuvo dominada por la ideología socialista y fuertemente controlada por el Partido Comunista. El currículum presentaba una interpretación restringida de la historia..
Editorial
Que los grupos armados ilegales requieren alcanzar una viabilidad financiera para mantenerse y (excepcionalmente) tomarse el poder es un hecho ampliamente comprobado en diferentes contextos nacionales. De igual manera, hay un creciente consenso académico en lo que se refiere a que la búsqueda de lucro constituye una motivación insuficiente para dar cuenta de las múltiples formas que adoptan los conflictos armados internos en diferentes países. En pocas palabras, si antes la pregunta era ¿codi..
Changing Weather: China's Role in Latin America's Climate Change Policy
El artículo trata el problema de si -en línea con el acercamiento económico de China hacia América Latina durante la última década- la región ha experimentado cambios políticos en términos de la política exterior de sus respectivos países, cambiando su alineamiento tradicional con las posiciones del hegemón regional, Estados Unidos. Teniendo en cuenta este enfoque general, el proyecto de investigación se centra en evaluar un tema específico de la gobernanza global: la política del cambio climático. Aquí, encontré una diferencia marcada entre la posición china y la estadounidense, que constituyen dos polos opuestos entre los que deben operar los países latinoamericanos. Tuve en cuenta dos países en términos de ubicación discursiva entre China y Estados Unidos en materia de la política sobre el cambio climático: Brasil y Chile. Logré identificar cambios discursivos durante esa década que sugieren una alineación política de los dos países latinoamericanos con China.The paper addresses the issue of whether - in line with the Chinese economic approximation to Latin America during the last decade - the region has experienced political changes in terms of countries' foreign policies, shifting their traditional alignment with the positions of the regional hegemon, the United States. Given this general focus, the research project focuses on evaluating a specific issue of global governance: climate change policy. Here I find a marked difference between the Chinese and the US position, constituting two opposing poles between which Latin American countries must operate. I consider the cases of two countries, Brazil and Chile, in terms of their discursive location between China and the United States on global climate change policy. I was able to identify discursive changes throughout the decade that suggest a political alignment of the two Latin American countries with China
China and Latin America: A marriage made in heaven?
Durante los últimos veinte años, el asombroso desarrollo económico y una política exterior más proclive hacia el exterior por parte de China han moldeado las relaciones internacionales de manera definitiva. En este contexto, América Latina encuentra un panorama favorable para su intercambio, tanto económico como político, con la gran potencia emergente al interactuar en el marco de un modelo cooperativo de ganancia mutua entre países en desarrollo. Pero, ¿es aquella relación realmente “un matrimonio hecho en el cielo”? El presente artículo busca identificar los intereses en juego en dicha relación, para lo cual, en un primer momento, tras el análisis del desarrollo político y económico chino, identifica tres pilares sobre los cuales el país asiático ha basado sus relaciones con países desarrollados; a saber: la economía, la cultura y la diplomacia. Seguidamente, mediante el empleo de las categorías de “hard power” y “soft power”, señala las diferencias en el ascenso y el comportamiento chino frente a aquellos de potencias tradicionales como Estados Unidos, y, finalmente, presenta un panorama sobre la estrategia que actualmente emplea el gigante asiático frente a la región latinoamericana.During the last twenty years, China's astonishing economic development, and its pursuit of a more outwardly-oriented foreign policy, have shaped international politics to a significant degree. Offered a model of cooperation based on mutual gains between developing countries, Latin America faces a more favorable panorama for its foreign relations, both economic and political, with China. However, is this relationship really "a marriage made in heaven"? This article seeks to identify the interests at play in the relationship between China and Latin America. First, following an analysis of China's political and economic development, it identifies three pillars upon which China has based its relations with developing countries: economics; culture; and diplomacy. Second, utilizing the analytical categories of "hard" and "soft" power, the article compares the rise of China, and its behavior, to that of traditional great powers such as the United States. Finally, the article gives an overview of the current Chinese strategy vis-à-vis the Latin American region
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