Globalization and the (Mis)Governance of Nations

Arthur Blouin, Sayantan Ghosal and Sharun Mukand
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Arthur Blouin: University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We analyze whether or not the globalization of capital, `disciplines' governments and improves governance. We demonstrate that globalization a ects governance, by increasing a country's vulnerability to sudden capital ight. This increased threat of capital ight can discipline governments and improve governance and welfare by placing countries in a `golden straitjacket'. However, globalization may also overdiscipline' governments { resulting in a perverse impact on governmental incentives that catalyzesmis)governance. Accordingly, the paper suggests a novel (and quali ed) role for capital controls. Finally, we provide some suggestive evidence consistent with the predictions from our theoretical framework.

Keywords: Globalization, Governance; Capital Flight; Capital Controls, Discipline. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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http://www2.warwick.ac.uk/fac/soc/economics/resear ... s/69.2012_mukand.pdf

Related works:
Working Paper: Globalization and the (Mis)Governance of Nations (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:69

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