Financialisation and Economic Policy: The Issue of Capital Control in the Developing Countries

Kalim Siddiqui, null

doi:10.13169/worlrevipoliecon.8.4.0564

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World Review of Political Economy

Volume 8, Issue 4

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Financialisation and Economic Policy: The Issue of Capital Control in the Developing Countries

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Author(s): Kalim Siddiqui

Publication date (Print): Winter 2017

Journal: World Review of Political Economy

Publisher: Pluto Journals

Keywords: developing countries, capital control, financialisation and instability

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Journal

Journal ID (doi): 10.13169

Journal ID (publisher-id): worlrevipoliecon

Title: World Review of Political Economy

Publisher: Pluto Journals

ISSN (Print): 2042891X

ISSN (Electronic): 20428928

Publication date (Print): Winter 2017

Volume: 8

Issue: 4

Pages: 564-589

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Publisher ID: worlrevipoliecon.8.4.0564

DOI: 10.13169/worlrevipoliecon.8.4.0564

SO-VID: 94d66591-a7c5-47c0-8541-90a8fa684d5b

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References

Aizenman, J., and G. K. Pasricha. 2013. “Why Do Emerging Markets Liberalise Capital Outflows Control: Fiscal vs Net Capital Flows Concerns.” NBER Publications. Accessed March 16, 2017. www.nber.org/authors/joshua_aizenman.
Aleem, A. 2010. “Transmission Mechanism of Monetary Policy in India.” Journal of Asian Economics 21: 186–97.
Arestis, P., and M. Glickman. 2002. “Financial Crisis in South East Asia: Dispelling Illusion the Minskyan Way” Cambridge Journal of Economics 26 (2): 237–60.
Balin, B. J. 2008. “India's New Capital Restrictions: What They Are, Why They Were Created and Have They Been Effective?” School of Advanced International Studies, John Hopkins University, Washington, DC.
Bond, P., and A. Garcia, eds. 2015. BRICS: An Anti-Capitalist Critique . London: Pluto Press.
Bonizzi, B. 2014. “Financialization in the Developing and Emerging Countries.” International Journal of Political Economy 42 (4): 83–107.
Central Bank of Brazil (BCB). 2014. “Economic Indicators.” Accessed March 16, 2017. http://www.bcb.gov.br/.
Chang, Ha-Joon, and I. Grabel. 2014. Reclaiming Development: An Alternative Economic Policy Manual . London: Zed Books.
Crotty, J., and G. Epstein. 1999. “A Defence of Capital Control in the Light of Asian Financial Crisis.” Journal of Economic 33 (2): 427–33.
Dymski, G. 2010. “Why the Subprime Crisis Is Different: A Minskyian Approach.” Cambridge Journal of Economics 34 (2): 239–55.
Edison, H. J., and C. M. Reinhart. 2000. “Capital Controls during Financial Crises: The Case of Malaysia and Thailand.” Accessed July 25, 2016. https://www.federalreserve.gov/pubs/ifdp/2000/662/ifdp662.pdf.
Epstein, G., ed. 2005a. Capitals Control in Developing Countries . Cheltenham, UK: Edward Elgar.
Epstein, G. 2005b. “Introduction.” in Financialization and the World Economy , edited by G. Epstein, 3–16. Cheltenham, UK: Edward Elgar.
Feldstein, M., and C. Horioka. 1980. “Domestic Saving and International Capital Flows.” Economic Journal 90: 314–29.
Fine, B. 2014. “Financialization from a Marxist Perspective.” International Journal of Political Economy 42 (4): 47–66.
Gallagher, K. 2014. “Countervailing Monetary Policy: Re-regulating Capital Flows in Brazil and South Korea.” Review in International Political Economy 22 (1): 77–102.
Gallagher, K., and Y. Tian. 2017. “Regulating Capital Flows in Emerging Markets: The IMF and the Global Financial Crisis.” Review of Development Finance , June: 1–12. http://dx.doi.org/10.1016/j.rdf.2017.05.002.
Ghosh, J., and C. P. Chandrasekhar. 2009. “The Costs of ’Coupling’: The global crisis and the Indian economy.” Cambridge Journal of Economics 33 (4): 725–39.
Grabel, I. 2006. “International Private Capital Flows and Developing Countries.” in Rethinking Development Economics , edited by Ha-Joon Chang, 324–45. London: Anthem.
IMF. 2012. Liberalising Capital Flows and Managing Outflows . Washington, DC: IMF.
IMF. 2016. Capital Flows to Emerging Markets . Washington, DC: IMF.
Kaltenbrunner, A., and J. P. Painceira. 2015. “Developing Countries' Changing Nature of Financial Integration and New Forms of External Vulnerability: The Brazilian Experience.” Cambridge Journal of Economics 39 (5): 1281–1306. doi:10.1093/cje/beu038.
Kaplan, E., and D. Rodrik. 2001. “Did the Malaysian Capital Control Works?” Accessed July 25, 2016. http://www.nber.org/papers/w8142.
Klein, M. W. 2012. “Capital Control: Gates and Walls, Brookings Institution.“ Accessed July 25, 2016. www.brookings.edu/~/media/Projects/…/Fall%202012/2012b_Klein.pdf.
Levy-Orlik, N. 2012. “Financial Markets in Developing Countries.” in Handbook of Critical Issues in Finance , edited by J. Toporowsk and J. Mitchell, 113–20. Cheltenham, UK: Edward Elgar.
Levy-Orlik, N. 2014. “Financialization and Economic Growth in Developing Countries: The Case of Mexican Economy.” International Journal of Political Economy 42 (4): 108–27.
Magud, N., and C. M. Reinhart. 2006. “Capital Control: An Evaluation.” NBER working paper series. Accessed March 16, 2017. https://www.nber.org/papers/w11973.
Minsky, H. P. 1986. Stabilizing and Unstable Economy . New Haven, CT: Yale University Press.
Mishkin, F. S. 2004. “Can Inflation Targeting Work in Emerging Market Countries?” NBER Working Paper No. 10646, July. Accessed March 16, 2017. http://www.nber.org/papers/w10646.
Mitchell, J., and J. Toporowski. 2014. “Critical Observation on Financialization and the Financial Process.” International Journal of Political Economy 42 (4): 67–82. doi:10.2753/IJP0891-191640404.
Obstfeld, M. 1998. “The Global Capital Market: Benefactor or Menace?” Journal of Economic Perspectives 12 (4): 9–30.
Ocampo, J. A., and J. E. Stiglitz, eds. 2008. Capital Markets Liberalization and Development . New York: Oxford University Press.
Ostry, J. D., et al. 2010. “Capital Inflows: The Role of Control.” IMF. Accessed March 16, 2017. https://www.imf.org/external/pubs/ft/spn/2010/spn1004.pdf.
Ostry, J. D., P. Loungani, and D. Furceri. 2016. “Neoliberalism: Oversold?” Finance and Development 53 (4): 9–30. June. Accessed March 16, 2017. http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm.
Reinhart, C. M., and K. S. Rogoff. 2011. “From Financial Crash to Debt Crisis.” American Economic Review 101: 1676–706.
Robinson, J. 1971. Economic Heresies: Old Fashioned Questions in Economic Theory . Basingstoke: Macmillan.
Sen, P. 2007. “Capital Inflows, Financial Repression and Macroeconomic Policy in India since reforms.” Oxford Review of Economic Policy 23 (2): 292–310.
Siddiqui, K. 1989. “Colonialism, Hunger and Backwardness in the Developing Countries.” [In Norwegian.] Materialisten , no. 3/4: 111–35.
Siddiqui, K. 1994. “World Bank vs Environment in the Developing Countries.” [In Norwegian.] Humanekologi , no. 3/4: 34–48.
Siddiqui, K. 1998. “The Export of Agricultural Commodities, Poverty and Ecological Crisis: A Case Study of Central American Countries.” Economic and Political Weekly 33 (39): 128–37.
Siddiqui, K. 2009a. “The Current Financial Crisis and Its Impact on the Emerging Economies—China and India.” Research in Applied Economics 1 (2): 1–28.
Siddiqui, K. 2009b. “The Political Economy of Growth in China and India.” Journal of Asian Public Policy 1 (2): 17–35.
Siddiqui, K. 2010. “Globalisation and Neo-liberal Economic Reforms in India: A Critical Review.” in Globalization in India: New Frontiers and Emerging Challenges , edited by S. K. Pramanick and R. Ganguly, 219–43. New Delhi: Prentice Hall.
Siddiqui, K. 2012. “Malaysia's Socio-Economic Transformation in Historical Perspective,” International Journal of Business and General Management 1 (2): 21–50.
Siddiqui, K. 2014a. “Contradictions in Development: Growth and Crisis in Indian Economy.” Economic and Regional Studies 7 (3): 82–98.
Siddiqui, K. 2014b. “Flows of Foreign Capital into Developing Countries: A Critical Review.” Journal of International Business and Economics 2 (1): 29–46.
Siddiqui, K. 2014c. “Modernisation and Displacement of Rural Communities in India.” Journal of Social Business 4 (2–3): 3–27.
Siddiqui, K. 2015a. “Trade Liberalisation and Economic Development: A Critical Review,” International Journal of Political Economy 44 (3): 228–47.
Siddiqui, K. 2015b. “Foreign Capital Investment into Developing Countries: Some Economic Policy Issues.” Research in World Economy 6 (2): 14–29.
Siddiqui, K. 2015c. “Economic Policy Issues.” Equilibrium Quarterly Journal of Economics and Economic Policy 10 (1): 9–32.
Siddiqui, K. 2016. “A Study of Singapore as a Developmental State.” in Chinese Global Production Networks in ASEAN , edited by Young-Chan Kim, 157–88. London: Springer.
Stiglitz, J. E. 2004. “Capital-Market Liberalization, Globalization, and the IMF.” Oxford Review of Economic Policy 20 (1): 57–71.
Stockhammer, E. 2015. “Rising Inequality as a Cause of the Present Crisis.” Cambridge Journal of Economics 39: 935–58.
Soederberg, S. 2015. “The BRICS' Dangerous Endorsement of Financial Inclusion.” in BRICS: An Anti-Capitalist Critique , edited by P. Bond and A. Garcia, 251–53. London: Pluto Press.
United Nations Development Programme. 2013. The Rise of the South: Human Progress in a Diverse World . New York: United Nations Development Programme.
Wade, R. 1990. Governing the Market: Economic Theory and the Role of Government in the East Asian Industrialisation . Princeton, NJ: Princeton University Press.
Williamson, J. G. 2007. “Global Capital Markets in the Long Run: A Review of Maurice Obstfeld and Alan Taylor's Global Capital Markets.” Journal of Economic Literature XLV: 400–09.
Zhang, X. 2009. “From Banks to Markets: Malaysian and Taiwanese Finances and Transition.” Review of International Political Economy 16 (3): 382–408.

Comments

Comment on this article

[1] Aizenman, J., and G. K. Pasricha. 2013. “Why Do Emerging Markets Liberalise Capital Outflows Control: Fiscal vs Net Capital Flows Concerns.” NBER Publications. Accessed March 16, 2017. www.nber.org/authors/joshua_aizenman.

[2] Aleem, A. 2010. “Transmission Mechanism of Monetary Policy in India.” Journal of Asian Economics 21: 186–97.

[3] Arestis, P., and M. Glickman. 2002. “Financial Crisis in South East Asia: Dispelling Illusion the Minskyan Way” Cambridge Journal of Economics 26 (2): 237–60.

[4] Balin, B. J. 2008. “India's New Capital Restrictions: What They Are, Why They Were Created and Have They Been Effective?” School of Advanced International Studies, John Hopkins University, Washington, DC.

[5] Bond, P., and A. Garcia, eds. 2015. BRICS: An Anti-Capitalist Critique . London: Pluto Press.

[6] Bonizzi, B. 2014. “Financialization in the Developing and Emerging Countries.” International Journal of Political Economy 42 (4): 83–107.

[7] Central Bank of Brazil (BCB). 2014. “Economic Indicators.” Accessed March 16, 2017. http://www.bcb.gov.br/.

[8] Chang, Ha-Joon, and I. Grabel. 2014. Reclaiming Development: An Alternative Economic Policy Manual . London: Zed Books.

[9] Crotty, J., and G. Epstein. 1999. “A Defence of Capital Control in the Light of Asian Financial Crisis.” Journal of Economic 33 (2): 427–33.

[10] Dymski, G. 2010. “Why the Subprime Crisis Is Different: A Minskyian Approach.” Cambridge Journal of Economics 34 (2): 239–55.

[11] Edison, H. J., and C. M. Reinhart. 2000. “Capital Controls during Financial Crises: The Case of Malaysia and Thailand.” Accessed July 25, 2016. https://www.federalreserve.gov/pubs/ifdp/2000/662/ifdp662.pdf.

[12] Epstein, G., ed. 2005a. Capitals Control in Developing Countries . Cheltenham, UK: Edward Elgar.

[13] Epstein, G. 2005b. “Introduction.” in Financialization and the World Economy , edited by G. Epstein, 3–16. Cheltenham, UK: Edward Elgar.

[14] Feldstein, M., and C. Horioka. 1980. “Domestic Saving and International Capital Flows.” Economic Journal 90: 314–29.

[15] Fine, B. 2014. “Financialization from a Marxist Perspective.” International Journal of Political Economy 42 (4): 47–66.

[16] Gallagher, K. 2014. “Countervailing Monetary Policy: Re-regulating Capital Flows in Brazil and South Korea.” Review in International Political Economy 22 (1): 77–102.

[17] Gallagher, K., and Y. Tian. 2017. “Regulating Capital Flows in Emerging Markets: The IMF and the Global Financial Crisis.” Review of Development Finance , June: 1–12. http://dx.doi.org/10.1016/j.rdf.2017.05.002.

[18] Ghosh, J., and C. P. Chandrasekhar. 2009. “The Costs of ’Coupling’: The global crisis and the Indian economy.” Cambridge Journal of Economics 33 (4): 725–39.

[19] Grabel, I. 2006. “International Private Capital Flows and Developing Countries.” in Rethinking Development Economics , edited by Ha-Joon Chang, 324–45. London: Anthem.

[20] IMF. 2012. Liberalising Capital Flows and Managing Outflows . Washington, DC: IMF.

[21] IMF. 2016. Capital Flows to Emerging Markets . Washington, DC: IMF.

[22] Kaltenbrunner, A., and J. P. Painceira. 2015. “Developing Countries' Changing Nature of Financial Integration and New Forms of External Vulnerability: The Brazilian Experience.” Cambridge Journal of Economics 39 (5): 1281–1306. doi:10.1093/cje/beu038.

[23] Kaplan, E., and D. Rodrik. 2001. “Did the Malaysian Capital Control Works?” Accessed July 25, 2016. http://www.nber.org/papers/w8142.

[24] Klein, M. W. 2012. “Capital Control: Gates and Walls, Brookings Institution.“ Accessed July 25, 2016. www.brookings.edu/~/media/Projects/…/Fall%202012/2012b_Klein.pdf.

[25] Levy-Orlik, N. 2012. “Financial Markets in Developing Countries.” in Handbook of Critical Issues in Finance , edited by J. Toporowsk and J. Mitchell, 113–20. Cheltenham, UK: Edward Elgar.

[26] Levy-Orlik, N. 2014. “Financialization and Economic Growth in Developing Countries: The Case of Mexican Economy.” International Journal of Political Economy 42 (4): 108–27.

[27] Magud, N., and C. M. Reinhart. 2006. “Capital Control: An Evaluation.” NBER working paper series. Accessed March 16, 2017. https://www.nber.org/papers/w11973.

[28] Minsky, H. P. 1986. Stabilizing and Unstable Economy . New Haven, CT: Yale University Press.

[29] Mishkin, F. S. 2004. “Can Inflation Targeting Work in Emerging Market Countries?” NBER Working Paper No. 10646, July. Accessed March 16, 2017. http://www.nber.org/papers/w10646.

[30] Mitchell, J., and J. Toporowski. 2014. “Critical Observation on Financialization and the Financial Process.” International Journal of Political Economy 42 (4): 67–82. doi:10.2753/IJP0891-191640404.

[31] Obstfeld, M. 1998. “The Global Capital Market: Benefactor or Menace?” Journal of Economic Perspectives 12 (4): 9–30.

[32] Ocampo, J. A., and J. E. Stiglitz, eds. 2008. Capital Markets Liberalization and Development . New York: Oxford University Press.

[33] Ostry, J. D., et al. 2010. “Capital Inflows: The Role of Control.” IMF. Accessed March 16, 2017. https://www.imf.org/external/pubs/ft/spn/2010/spn1004.pdf.

[34] Ostry, J. D., P. Loungani, and D. Furceri. 2016. “Neoliberalism: Oversold?” Finance and Development 53 (4): 9–30. June. Accessed March 16, 2017. http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm.

[35] Reinhart, C. M., and K. S. Rogoff. 2011. “From Financial Crash to Debt Crisis.” American Economic Review 101: 1676–706.

[36] Robinson, J. 1971. Economic Heresies: Old Fashioned Questions in Economic Theory . Basingstoke: Macmillan.

[37] Sen, P. 2007. “Capital Inflows, Financial Repression and Macroeconomic Policy in India since reforms.” Oxford Review of Economic Policy 23 (2): 292–310.

[38] Siddiqui, K. 1989. “Colonialism, Hunger and Backwardness in the Developing Countries.” [In Norwegian.] Materialisten , no. 3/4: 111–35.

[39] Siddiqui, K. 1994. “World Bank vs Environment in the Developing Countries.” [In Norwegian.] Humanekologi , no. 3/4: 34–48.

[40] Siddiqui, K. 1998. “The Export of Agricultural Commodities, Poverty and Ecological Crisis: A Case Study of Central American Countries.” Economic and Political Weekly 33 (39): 128–37.

[41] Siddiqui, K. 2009a. “The Current Financial Crisis and Its Impact on the Emerging Economies—China and India.” Research in Applied Economics 1 (2): 1–28.

[42] Siddiqui, K. 2009b. “The Political Economy of Growth in China and India.” Journal of Asian Public Policy 1 (2): 17–35.

[43] Siddiqui, K. 2010. “Globalisation and Neo-liberal Economic Reforms in India: A Critical Review.” in Globalization in India: New Frontiers and Emerging Challenges , edited by S. K. Pramanick and R. Ganguly, 219–43. New Delhi: Prentice Hall.

[44] Siddiqui, K. 2012. “Malaysia's Socio-Economic Transformation in Historical Perspective,” International Journal of Business and General Management 1 (2): 21–50.

[45] Siddiqui, K. 2014a. “Contradictions in Development: Growth and Crisis in Indian Economy.” Economic and Regional Studies 7 (3): 82–98.

[46] Siddiqui, K. 2014b. “Flows of Foreign Capital into Developing Countries: A Critical Review.” Journal of International Business and Economics 2 (1): 29–46.

[47] Siddiqui, K. 2014c. “Modernisation and Displacement of Rural Communities in India.” Journal of Social Business 4 (2–3): 3–27.

[48] Siddiqui, K. 2015a. “Trade Liberalisation and Economic Development: A Critical Review,” International Journal of Political Economy 44 (3): 228–47.

[49] Siddiqui, K. 2015b. “Foreign Capital Investment into Developing Countries: Some Economic Policy Issues.” Research in World Economy 6 (2): 14–29.

[50] Siddiqui, K. 2015c. “Economic Policy Issues.” Equilibrium Quarterly Journal of Economics and Economic Policy 10 (1): 9–32.

[51] Siddiqui, K. 2016. “A Study of Singapore as a Developmental State.” in Chinese Global Production Networks in ASEAN , edited by Young-Chan Kim, 157–88. London: Springer.

[52] Stiglitz, J. E. 2004. “Capital-Market Liberalization, Globalization, and the IMF.” Oxford Review of Economic Policy 20 (1): 57–71.

[53] Stockhammer, E. 2015. “Rising Inequality as a Cause of the Present Crisis.” Cambridge Journal of Economics 39: 935–58.

[54] Soederberg, S. 2015. “The BRICS' Dangerous Endorsement of Financial Inclusion.” in BRICS: An Anti-Capitalist Critique , edited by P. Bond and A. Garcia, 251–53. London: Pluto Press.

[55] United Nations Development Programme. 2013. The Rise of the South: Human Progress in a Diverse World . New York: United Nations Development Programme.

[56] Wade, R. 1990. Governing the Market: Economic Theory and the Role of Government in the East Asian Industrialisation . Princeton, NJ: Princeton University Press.

[57] Williamson, J. G. 2007. “Global Capital Markets in the Long Run: A Review of Maurice Obstfeld and Alan Taylor's Global Capital Markets.” Journal of Economic Literature XLV: 400–09.

[58] Zhang, X. 2009. “From Banks to Markets: Malaysian and Taiwanese Finances and Transition.” Review of International Political Economy 16 (3): 382–408.

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