Template-type: ReDIF-Paper 1.0
Author-Name: Rui P. Esteves
Author-Workplace-Name: Department of Economics and Brasenose College, University of Oxford, 
Author-Email: rui.esteves@economics.ox.ac.uk
Title: The Political Economy of Global Financial Liberalisation in Historical Perspective
Abstract: This paper is a first attempt to garner the theory and evidence on the political 
economy of the first wave of financial liberalisation during the nineteenth and early 
twentieth century, and of its demise after World War I. Not everyone gained from the process
of globalisation (of trade, labour, and finance), which brought about important changes in 
the structure of the economy and the distribution of income in nations across the world. 
This paper explores how the economic incentives generated by these dislocations translated, 
through the political system, into choices about openness to foreign capital and financial 
integration. The period before World War I is remarkable by the almost absence of restrictions
on cross-border capital flows, which may explain the little attention it has received in the 
historical literature, compared to the extensive study of trade protectionism in this period. 
After the War, many countries experimented with capital controls which varied in nature and 
intensity and were intensified during the Depression. Despite the attempt made here to reconcile 
these stylized facts to models of political economy, the analysis requires a better empirical 
foundation and some suggestions for further research are also proposed.
Classification-JEL: F4, G18, N20
Keywords: political economy, financial liberalisation, capital controls, pre-war
Length: 41 pages
Creation-Date: 2011-06-01
Number: _089
File-URL: http://www.nuffield.ox.ac.uk/economics/History/Paper89/esteves89.pdf
File-Format: application/pdf
Handle: RePEc:nuf:esohwp:_089