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Regulating international finance and the evolving imbalance of capitalisms since the 1970s

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  • Kalinowski, Thomas
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    Abstract

    In this paper, I put the ongoing G20 process of improving the regulation of international finance into a historically informed perspective. To understand the driving forces behind and obstacles to international cooperation in governing finance I combine concepts from international political economy and comparative political economy (IPE and CPE) that have previously been only loosely connected. Building on the IPE literature that highlights the historical and political embeddedness of financial regulation I depart from the IPE focus on the globalization of US-UK financial market capitalism. CPE studies show that, since the 1970s, different variations of capitalism have reacted in distinct ways to the collapse of the Bretton Woods system, lower growth rates and saturated domestic markets. Most notably, there has been a divergence between the approaches of financializing countries (US, UK) and export-oriented countries (Germany, East Asian nations). The interdependence between financialized and export-oriented variations of capitalism has contributed to the dynamics and crises of international finance for the past four decades. This 'imbalance of capitalisms' also became an obstacle to international cooperation in regulating finance. Faced with the 'trilemma of economic policies,' the financialized and export-oriented variants of capitalism have chosen different combinations of macroeconomic policies, currency policies, and the regulation of financial flows and financial firms. This divergence has led to conflicting preferences with regard to international cooperation to regulate finance. -- Dieses Papier betrachtet die historischen Hintergründe der Schwierigkeiten und Konflikte bei der (Re-)regulierung der internationalen Finanzbeziehungen in der G20. Diese Konflikte lassen sich besonders gut bei dem Versuch der Koordinierung von Fiskal- und Geldpolitik, der Regulierung von Banken und Finanzströmen sowie der Reduzierung globaler wirtschaftlicher Ungleichgewichte beobachten. Hierzu werden bisher nur unzureichend verbundene Ansätze aus der Internationalen und der Vergleichenden Politischen Ökonomie (IPÖ/VPÖ) kombiniert. Die IPÖ-inspirierte Betrachtung internationaler Kooperation verbunden mit dem VPÖ-inspirierten Fokus auf die pfadabhängig unterschiedlichen Spielarten des Kapitalismus ermöglicht ein besseres Verständnis der Hintergründe von Konflikten bei der Regulierung internationaler Finanzbeziehungen. Besonders berücksichtigt werden hierbei die unterschiedlichen Entwicklungen verschiedener Spielarten des Kapitalismus seit dem Zusammenbruch des Bretton-Woods-Systems Anfang der 1970er-Jahre. Die Interdependenz von finanzmarktorientiertem Kapitalismus in den Vereinigten Staaten und Großbritannien sowie exportorientierter Kapitalismusvarianten in Europa und Ostasien haben die internationalen Finanzbeziehungen in den letzten vier Jahrzehnten entscheidend geprägt. Beide Modelle unterscheiden sich ganz erheblich bezüglich der institutionellen Arrangements bei der Regulierung von Finanzbeziehungen und der Fiskal-, Geld- und Währungspolitik. Diese Unterschiede wiederum führen zu divergierenden Präferenzen und Konflikten bei der internationalen Koordinierung der Regulierung von Finanzbeziehungen.

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    Paper provided by Max Planck Institute for the Study of Societies in its series MPIfG Discussion Paper with number 11/10.

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    Date of creation: 2011
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    Handle: RePEc:zbw:mpifgd:1110

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    1. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
    2. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752, September.
    3. Joshua Aizenman & Menzie D. Chinn & Hiro Ito, 2008. "Assessing the Emerging Global Financial Architecture: Measuring the Trilemma's Configurations over Time," NBER Working Papers 14533, National Bureau of Economic Research, Inc.
    4. Whitley, Richard, 2003. "The End of Diversity? Prospects for German and Japanese Capitalism. Edited by Kozo Yamamura and Wolfgang Streeck. Ithaca, NY: Cornell University Press, 2003. Pp. xiii, 401. $49.95, 31.50 cloth; $24.95," The Journal of Economic History, Cambridge University Press, vol. 63(04), pages 1181-1183, December.
    5. Nölke, Andreas, 2011. "Transnational economic order and national economic institutions: comparative capitalism meets international political economy," MPIfG Working Paper 11/3, Max Planck Institute for the Study of Societies.
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