Sources and Legitimacy of Financial Liberalization
This article seeks to clarify how we understand domestic and international sources of globalization and specifically how we explain financial liberalization across countries. The article also develops our understanding of the underlying legitimacy of financial liberalization. We debate e.g. Abiad and Mody (2005) and others who have found political factors to have little impact on financial openness. Using the same data undergirding such conclusions we argue, in contrast, that even a slight broadening of the political variables employed in the model and much closer attention to “input” and “output” aspects of the political legitimacy of financial liberalization over time reveal a more central role for politics in shaping liberalization. Input legitimacy involves the representation of stakeholders in initial and ongoing decisions to liberalize, while “output” legitimacy concerns liberalization’s distributional consequences and management thereof over time. Several empirical measures of domestic-national and international political factors plausibly influence such aspects of legitimacy and are found to play a significant role in shaping liberalization, suggesting legitimation politics to be more important to financial openness than existing studies have typically acknowledged.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Web page: http://www2.le.ac.uk/departments/economics
More information through EDIRC
|Order Information:|| Web: http://www2.le.ac.uk/departments/economics/research/discussion-papers Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abdul Abiad & Ashoka Mody, 2005.
"Financial Reform: What Shakes It? What Shapes It?,"
American Economic Review,
American Economic Association, vol. 95(1), pages 66-88, March.
- Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57, December.
- Yongfu Huang, 2009. "The political economy of financial reform: are Abiad and Mody right?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1207-1213.
- Anna Maria Mayda & Kevin H. O'Rourke & Richard Sinnott, 2007.
"Risk, Government and Globalization: International Survey Evidence,"
NBER Working Papers
13037, National Bureau of Economic Research, Inc.
- Anna Maria Mayda & Kevin H. O’Rourke & Richard Sinnott, 2007. "Risk, Government and Globalization: International Survey Evidence," Trinity Economics Papers tep0507, Trinity College Dublin, Department of Economics.
- Mayda, Anna Maria & O'Rourke, Kevin Hjortshøj & Sinnott, Richard, 2007. "Risk, Government and Globalization: International Survey Evidence," CEPR Discussion Papers 6354, C.E.P.R. Discussion Papers.
- Anna Maria Mayda & Kevin H. O'Rourke, 2007. "Risk, Government andd Globalization: International Survey Evidence," The Institute for International Integration Studies Discussion Paper Series iiisdp218, IIIS.
- Bergh, Andreas & Nilsson, Therese, 2010. "Do liberalization and globalization increase income inequality?," European Journal of Political Economy, Elsevier, vol. 26(4), pages 488-505, December.
- Held, David, 1997. "Democracy and globalization," MPIfG Working Paper 97/5, Max Planck Institute for the Study of Societies.
- Lai, Yu-Bong, 2010. "The political economy of capital market integration and tax competition," European Journal of Political Economy, Elsevier, vol. 26(4), pages 475-487, December.
- Bretschger, Lucas & Hettich, Frank, 2000.
"Globalisation, capital mobility and tax competition: Theory and evidence for OECD countries,"
07/2000, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
- Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
- Burgoon, Brian, 2001. "Globalization and Welfare Compensation: Disentangling the Ties that Bind," International Organization, Cambridge University Press, vol. 55(03), pages 509-551, June.
- Hays, Jude C. & Ehrlich, Sean D. & Peinhardt, Clint, 2005. "Government Spending and Public Support for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis," International Organization, Cambridge University Press, vol. 59(02), pages 473-494, April.
- Haggard, Stephan & Webb, Steven B, 1993. "What Do We Know about the Political Economy of Economic Policy Reform?," World Bank Research Observer, World Bank Group, vol. 8(2), pages 143-68, July.
- Abdul Abiad & Enrica Detragiache & Thierry Tressel, 2010.
"A New Database of Financial Reforms,"
IMF Staff Papers,
Palgrave Macmillan, vol. 57(2), pages 281-302, June.
- Philip Arestis & Panicos Demetriades, 1999. "Financial Liberalization: The Experience of Developing Countries," Eastern Economic Journal, Eastern Economic Association, vol. 25(4), pages 441-457, Fall.
- Robert J. Franzese Jr. & Jude C. Hays, 2006. "Strategic Interaction among EU Governments in Active Labor Market Policy-making," European Union Politics, , vol. 7(2), pages 167-189, June.
When requesting a correction, please mention this item's handle: RePEc:lec:leecon:11/45. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mrs. Alexandra Mazzuoccolo)
If references are entirely missing, you can add them using this form.