Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance

Cornell Studies in Money

by Kevin P. Gallagher

In Ruling Capital , Kevin P. Gallagher demonstrates how several emerging market and developing countries (EMDs) managed to reregulate cross-border financial flows in the wake of the global financial crisis, despite the political and economic difficulty of doing so at the national level. Gallagher also shows that some EMDs, particularly the BRICS coalition, were able to maintain or expand their sovereignty to regulate cross-border finance under global economic governance institutions. Gallagher combines econometric analysis with in-depth interviews with officials and interest groups in select emerging markets and policymakers at the International Monetary Fund, the World Trade Organization, and the G-20 to explain key characteristics of the global economy. Gallagher develops a theory of countervailing monetary power that shows how emerging markets can counter domestic and international opposition to the regulation of cross-border finance. Although many countries were able to exert countervailing monetary power in the wake of the crisis, such power was not sufficient to stem the magnitude of unstable financial flows that continue to plague the world economy. Drawing on this theory, Gallagher outlines the significant opportunities and obstacles to regulating cross-border finance in the twenty-first century.

Genres: Economics, Finance

248 pages, Hardcover

First published December 16, 2014

About the author

Kevin P. Gallagher is a professor of international relations at Boston University and senior researcher at the Global Development and Environment Institute at Tufts University. He has a monthly column in the Guardian (UK) and is also a poet. He lives with his wife and two children in Newton, MA.

Reviews

[Riley · Rating 2 out of 5]

This book feels like a dense academic paper that was needlessly expanded into a 200 page book.

[Darren · Rating 4 out of 5]

Are emerging-market and developing countries better equipped to govern capital flows that place a major impact on their economies? This is the central question examined by the author in this fairly high-level, academic text.

A lot more work remains possibly to do in order to prevent or mitigate the next financial crisis. It is not a matter of if, but when, as these things do go in cycles although the nature of a crisis can be different, triggered by a separate range of factors. As the world gets ever smaller thanks to advances in technology, with domestic economies being increasingly linked to regional and international markets, there are tremendous advantages to be had at times but there is also a dark, possibly insidious potential downside.

One theory constructed by the author is that emerging markets can challenge opposition to the regulation of cross-border finance, even though it is not sufficient to stem the magnitude of unstable financial flows.

This is no “light read” but it can be a compelling, important text for those who focus intensively on international economics, monetary policy and related subjects. As befitting such a book, there is a very extensive bibliography and index. It would have been nice if the book could have been a little more accessible for the “regular reader” who has an interest in international financial policy, although there would be a risk that the book’s focus would be diminished and diluted if it tried to be everything to everyone.

Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance, by Kevin P. Gallagher and published by Cornell University Press. ISBN �9780801453113, 232 pages. YYYY.

[Clare O'Beara · Rating 3 out of 5]

Ruling Capital deals with the flow of finance across borders and policy instruments to control and channel investment, or regulate the flow between banks. Global finance is the standard now and developing and emerging countries are hungry for investment. Have financiers, politicians and regulators learnt enough from the last global crash to stave off another such crash?

While I have no doubt that the author knows his subject, the presentation and density of text is unsuited to the general reader, and that is why I am not giving this book a higher rating. This is not a business manual, though the topic of long supply and production chains, and the connected funds, is definitely important to businesses in today's world.

Those working with or studying the topic will doubtless find Ruling Capital valuable. Economics and finance students, in particular, or those civil servants working for regulators, or bank officials, would be ideal readers. However the book's visual presentation could be improved upon to make it easier on the eye.

[!Tæmbuŝu]

KOBOBOOKS

Reviewed by Economonitor

[Ajay · Rating 4 out of 5]

Well-argued, well-researched, but far from an easy read, in fact, it's pretty jargon-y.