Globalization of Capital Flows and the (In)Disciplining of Nations

Arthur Blouin, Sayantan Ghosal and Sharun Mukand

Working Papers from Business School - Economics, University of Glasgow

Abstract: We analyze whether or not the globalization of capital, 'disciplines' governments and improves governance. We demonstrate that globalization affects governance, by increasing a country's vulnerability to sudden capital flight. This increased threat of capital flight 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 catalyzes (mis)governance. Accordingly, the paper suggests a novel (and qualified) role for capital controls. Finally, we provide some evidence consistent with the predictions from our theoretical framework.

Keywords: Globalization; Governance; Capital Flight; Capital Controls; Discipline. (search for similar items in EconPapers)
JEL-codes: F36 F55 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.gla.ac.uk/media/Media_829570_smxx.pdf (application/pdf)

Related works:
Journal Article: Globalization of capital flows and the (in)disciplining of nations (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2022_01

Access Statistics for this paper

More papers in Working Papers from Business School - Economics, University of Glasgow Contact information at EDIRC.
Bibliographic data for series maintained by Business School Research Team ().