Advertisement

International Capital Flows and Political Transition in Europe: Historical Perspectives

  • Larry Neal
Conference paper

Abstract

The relationship of international capital flows and the stability of national political regimeshas become a focal point of interest recently among political scientists. Jeffrey Frieden notes several reasons this should be so. First, gross capital flows across national borders have increased astronomically in the past 20 years and have become much larger than other forms of international economic transactions. Frieden noted that by April of 1989, “…foreign exchange trading in the world’s financial centers averaged about $650 billion a day, equivalent to nearly $500 million a minute,” and was 40 times the level of trade. He also reported that the 15 year increase (from 1974 to 1989) in international bank and bond lending meant that its relative size had risen from 5% to 25% of the aggregate GNP of the industrialized countries. (FRIEDEN, 1991, p. 428.) In the course of this dramatic rise in the importance of global finance, national economic policy-makers have increasingly found their traditional tools of macro-economic management to be undermined, irrelevant and even counter-productive. No longer can they control their prices, their interest rates, or their budgets, it is argued, all because of the ruthless rise of innovative forces in the global financial market. These market forces siphon off financial resources before governments can direct them to productive purposes domestically, or if funds flow in from abroad they may not be directed towards achieving the goals of the government. Moreover, the innovations of the global financial market place are proceeding at a pace far more rapid than government institutions or political consensuses can respond.

Keywords

Capital Flow International Capital Indirect Taxis International Capital Market Direct Taxis 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Brewer, J. (1989), The Sinews of Power. War, Money and the English State, 1688–1783, New York: Alfred A. Knopf.Google Scholar
  2. Dawson, F.G. (1990), The First Latin American Debt Crisis. The City of London and the 1822–25 Loan Bubble, New Haven, CT, Yale University Press.Google Scholar
  3. Dickson, P.G.M. (1967), The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756, London: MacMillan.Google Scholar
  4. Dumke, R. (1994), German Economic Unification in the 19th Century: The Political Economy of the Zollverein, Diskussionsbeiträge Nr. 4/94 des Instituts für Volkswirtschaftslehre, München: Universität der Bundeswehr München.Google Scholar
  5. Fremdling, R. (1975), Eisenbahnen und deutsches Wirtschaftswachstum, 1840–1873: ein Beitrag zur Entwicklungstheorie und zur Theorie der Infrastruktur, Dortmund: Gesellschaft für Westfälische Wirtschaftsgeschichte.Google Scholar
  6. Frieden, J. (1991), “Invested Interests: The Politics of National Economic Policies in a World of Global Finance,” International Organization, 45 (Autumn), pp. 425–451.CrossRefGoogle Scholar
  7. Hinrichs, H. (1966), A General Theory of Tax Structure Change During Economic Development, Cambridge, MA: Harvard Law School.Google Scholar
  8. Kindleberger, C.P. (1987), International Capital Movements, Cambridge: Cambridge University Press.Google Scholar
  9. Michie, R. (1987), The London and New York Stock Exchanges 1859–1914, London: Allen & Unwin.Google Scholar
  10. Neal, L. (1994), “The Finance of Business during the Industrial Revolution,” in Floud, R. and Mccloskey, D.N., eds., The Economic History of Great Britain, vol. 1, “1700–1860,” 2nd ed., Cambridge: Cambridge University Press.Google Scholar
  11. Neal, L. (1990), The Rise of Financial Capitalism: International Capital Markets in the Age of Reason, Cambridge: Cambridge University Press, (paperback edition in 1993 ).Google Scholar
  12. Neal, L. (1993), “Technological Advance and the Progress of Capital Market Integration in the Nineteenth Century,” in North, M., ed., Nordwesteuropa in der Weltwirtschaft 1750–1950, Stuttgart: Franz Steiner Verlag, 1993.Google Scholar
  13. Neal, L. (1994), “Why Crowding Out Did Not Occur and Crowding In Did: A New Look at British National Debt, 1694–1994,” paper presented at Economic History Association meetings, Cincinnati, Ohio.Google Scholar
  14. Newbery, D. (1987), “Taxation and Development,” ch. 7 in Newbery and Stern (1987).Google Scholar
  15. Newbery, D.; Stern, N., eds., (1987), The Theory of Taxation for Developing Countries, Washington, DC: World Bank.Google Scholar
  16. North, D.C.; Weingast, B. (1989), “Constitutions and Commitment: Evolution of Institutions Governing Public Choice in Seventeenth Century England,” Journal of Economic History, 49 (December), pp. 803–832.CrossRefGoogle Scholar
  17. Stern, F. (1979), Gold and Iron: Bismarck, Bleichroder and the Building of the German empire, New York: Vintage Books.Google Scholar
  18. Suzuki, T. (1994), Japanese Government Loan Issues on the London Capital Market, 1870–1913, London: Athlone Press.Google Scholar
  19. Tanzi, V. (1987), “Quantitative Characteristics of the Tax Systems of Developing Countries,” ch. 8 in Newbery and Stern (1987).Google Scholar
  20. Tilly, R. (1966), “The Political Economy of Public Finance and the Industrialization of Prussia, 1815–1866,” Journal of Economic History, 26 (December), 484–497.Google Scholar
  21. Tilly, R. (1967), “Public Finance and the Industrialization of Prussia, 1815–1866: A Correction,” Journal of Ecouomic History, 27 (September), p. 391.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1996

Authors and Affiliations

  • Larry Neal

There are no affiliations available

Personalised recommendations