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The Political Economy of Global Financial Liberalisation in Historical Perspective

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  • Rui P. Esteves

    ()
    (Department of Economics and Brasenose College, University of Oxford,)

Abstract

This paper is a first attempt to garner the theory and evidence on the political economy of the first wave of financial liberalisation during the nineteenth and early twentieth century, and of its demise after World War I. Not everyone gained from the process of globalisation (of trade, labour, and finance), which brought about important changes in the structure of the economy and the distribution of income in nations across the world. This paper explores how the economic incentives generated by these dislocations translated, through the political system, into choices about openness to foreign capital and financial integration. The period before World War I is remarkable by the almost absence of restrictions on cross-border capital flows, which may explain the little attention it has received in the historical literature, compared to the extensive study of trade protectionism in this period. After the War, many countries experimented with capital controls which varied in nature and intensity and were intensified during the Depression. Despite the attempt made here to reconcile these stylized facts to models of political economy, the analysis requires a better empirical foundation and some suggestions for further research are also proposed.

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Bibliographic Info

Paper provided by Economics Group, Nuffield College, University of Oxford in its series Oxford University Economic and Social History Series with number _089.

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Length: 41 pages
Date of creation: 01 Jun 2011
Date of revision:
Handle: RePEc:nuf:esohwp:_089

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Web page: http://www.nuff.ox.ac.uk/economics/

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Keywords: political economy; financial liberalisation; capital controls; pre-war;

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Cited by:
  1. Aled Davies, 2012. "The Evolution of British Monetarism: 1968-1979," Economics Series Working Papers Number 104, University of Oxford, Department of Economics.
  2. Aled Davies, 2012. "The Evolution of British Monetarism: 1968-1979," Oxford University Economic and Social History Series _104, Economics Group, Nuffield College, University of Oxford.
  3. Eric B. Schneider, 2012. "Real Wages and the Family: Adjusting Real Wages to Changing Demography in Pre-Modern England," Economics Series Working Papers Number 99, University of Oxford, Department of Economics.
  4. Eric Schneider, 2012. "Prices and Production: Agricultural Supply Response in Fourteenth-Century England," Economics Series Working Papers Number 97, University of Oxford, Department of Economics.

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