Premium
Unravelling Washington's Judgement Calls: The Cases of the Malaysian and Chilean Capital Controls
Author(s) -
Soederberg Susanne
Publication year - 2004
Publication title -
antipode
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.177
H-Index - 98
eISSN - 1467-8330
pISSN - 0066-4812
DOI - 10.1111/j.1467-8330.2004.00381.x
Subject(s) - capital (architecture) , capital outflow , opposition (politics) , judgement , currency , economics , capital market , financial capital , capital account , politics , liberalization , financial market , capital flows , political economy , market economy , finance , political science , capital formation , monetary economics , law , geography , archaeology , human capital
While the option of constraining cross‐border financial flows to emerging markets (capital controls) has taken a backseat in the official policy debates about strengthening the global financial architecture, the International Monetary Fund (IMF) has ceded that certain temporary measures to limit the inflow of hot money may be beneficial in achieving some breathing space for governments. In this sense, capital controls are only to be used as a means to reach the larger end, namely, the proper (neoliberal) management of financial liberalisation. Indeed, by sanctioning a particular type of capital control it is engaging in a political judgement call, which is based upon certain material interests, as opposed to mere economic logic. This becomes evident when we juxtapose two different types of capital controls: the Chilean unremunerated reserve requirement, which was endorsed by the Fund, and, conversely, the IMF's rejection of the Malaysian currency control. I suggest that the IMF's opposition to Malaysian controls stems from its perception that capital restraint on outflows threatens the imperative of free capital mobility, which benefits both the US and transnational financial capitals.