Global Capital and National Governments

by Layna Mosley

• ISBN13: 9780521815215
• ISBN10: 0521815215
• Format: Hardcover
• Copyright: 2003-02-03
• Publisher: Cambridge University Press

Summary

Global Capital and National Governments suggests that international financial integration does not mean the end of social democratic welfare policies. Capital market openness allows participants to react swiftly and severely to government policy; but in the developed world, capital market participants consider only a few government policies when making decisions. Governments that conform to capital market pressures in macroeconomic areas remain relatively unconstrained in supply-side and micro-economic policy areas. Therefore, despite financial globalization, cross-national policy divergence among advanced democracies remains likely. Still, in the developing world, the influence of financial markets on government policy autonomy is more pronounced. The risk of default renders market participants willing to consider a range of government policies in investment decisions. This inference, however, must be tempered with awareness that governments retain choice. As evidence for its conclusions, Global Capital and National Governments draws on interviews with fund managers, quantitative analyses, and archival investment banking materials.

Table of Contents

List of Figures and Tables	xi
Acknowledgments	xv
National Governments and Global Capital: A Recasting	1	(24)
Financial Market Influence on Government Policy: Theory and Hypotheses	25	(25)
Financial Market Influence in Developed Nations: An Empirical Assessment	50	(52)
Financial Market-Government Relations in Emerging Markets	102	(55)
Politics Meets Markets: Domestic Responses to Financial Market Pressures	157	(42)
Alternative Domestic Responses: Changes to Financial Market-Government Relations	199	(50)
History Repeating Itself? Financial Markets and National Government Policies Before the First World War	249	(55)
Financial Market-Government Relations in the Twenty-First Century	304	(17)
Appendix 2.1: Financial Market Interviews	321	(2)
Appendix 3.1: Data Definitions and Sources	323	(3)
Appendix 3.2: Full Results for Macroindicators Model	326	(1)
Appendix 4.1: The Components of the SDDS	327	(3)
Appendix 4.2: Rating Agency Methodologies	330	(3)
Appendix 4.3: Rating Agency Outcomes, 1997	333	(4)
Appendix 6.1: Nations in Capital Controls Data Set	337	(2)
References	339	(34)
Index	373