1. Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies Capital controls as a technical fix? A critical IPE perspective

2. Overview 1.Capital controls and economic science 2.Capital controls in an IPE perspective 3.Postneoliberalism and capital controls 4.Conclusions Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

3. 1. Capital controls & economic science Neoclassical economics & capital controls o open capital accounts beneficial efficient allocation of capital collateral benefits o first-best equilibrium based on faith in efficient markets Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

4. 1. Capital controls & economic science Heterodox economics and capital controls o open capital accounts not always beneficial domestic distortions (theory of the second best) herding behaviour o markets can be imperfect and/or inefficient Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

5. 1. Capital controls & economic science Capital controls as technical instrument o both in orthodox and heterodox economics o matter of good versus bad policy o depoliticized o neglects power relations between social forces Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

6. 2. Capital controls in IPE perspective Capital account liberalization & neoliberalism o transnationalization of capital increased structural power o constraint on progressive social/economic policies ex ante (attractive invetsment climate) ex post (exit power) o there is no alternative Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

7. 2. Capital controls in IPE perspective Orthodox economics & critical IPE o open capital accounts discipline policymakers o capital controls allowed when they do not endanger neoliberal project Orthodox economics has a class content Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

8. 3. Postneoliberalism & capital controls Capital controls have different objectives o financial stability o policy space interest rate / exchange rate interests of domestic capital domestic political considerations o transformative goal political-geographical dimension of neoliberalism Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

9. 3. Postneoliberalism & capital controls Objectives of current / recent controls o financial stability (e.g. Chile) o policy space (e.g. Brazil, China) o domestic political considerations (e.g. Malaysia) o transformative goal? Developed countries developing countries? Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

10. 3. Postneoliberalism & capital controls Power relations & capital controls o Power relations in ideas on capital controls policy making as a matter of technical expertise? class basis of neoclassical economics o Capital controls and their impact on power relations Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

11. 4. Conclusions First-best world image should be rejected Capital controls are political instrument Current controls are not postneoliberal Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies

12. 4. Conclusions Postneoliberal controls change power relations o controls on outflows o quantitative controls o permanent controls o multilaterally coordinated o for both developing countries and developed countries Conference presentation – Sacha Dierckx – 17/05/2012 Department of Political Science – Ghent Institute of International Studies