9 March 2011

REGAINING CONTROL? CAPITAL CONTROLS AND THE GLOBAL FINANCIAL CRISIS. By Kevin P. Gallagher. Global Development and Environment Institute, Tufts University, February 2011. The global financial crisis has triggered a transformation in thinking and practice regarding the role of government in managing international capital flows.  This paper traces and evaluates the re-emergence of capital controls as legitimate tools to promote financial stability.  Whereas capital controls were seen as "orthodox" by the framers of the Bretton Woods system, they were shunned during the neo-liberal era that began in the late 1970s. GDAE senior research associate Kevin P. Gallagher conducts a preliminary analysis of the effectiveness of capital controls in Brazil, South Korea, and Taiwan.  Gallagher finds supporting evidence that Brazil and Taiwan have been relatively successful in deploying controls, though South Korea's success has been more modest. The paper is available for download here.

BELGIUM'S MODEL BILATERAL INVESTMENT TREATY: A REVIEW. By Nathalie Bernasconi-Osterwalder and Lise Johnson. International Institute for Sustainable Development. 2011. The paper gives a background on International Investment Agreements (IIAs), notably on Bilateral Investment Treaties (BITs) and their development since 1959 when the first IIA was concluded. It presents an overview of the Belgian BITs and their specifics, and examines the scope of the Belgian Model BIT. A particular focus is placed on topics such as host country, home state and investor obligations, and on the provisions specifically addressing the environment, labour, and sustainable development. The paper contains a set of recommendations to help address the limitations of the current Belgian Model BIT and is available for download here.

THE GLOBALIZATION PARADOX: DEMOCRACY AND THE FUTURE OF THE WORLD ECONOMY. By Dani Rodrik. W. W. Norton & Company, 2011. Surveying three centuries of economic history, the author argues that we cannot simultaneously pursue democracy, national self-determination, and economic globalization and pushes for a leaner global system, putting national democracies front and centre. From the mercantile monopolies of the seventeenth-century empires to modern-day authority of the WTO, IMF and World Bank, the nations of the world have struggled to effectively harness globalization's promise. The economic narratives that underpinned these eras - the gold standard, the Bretton Woods regime, the "Washington Consensus" - brought great success and great failure. This book is available for purchase here.

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