Expression of Preferences: Systems of Investor Knowledge
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Chapter 3 discussed institutional investor preferences for stability and the possibility of the consequent devaluing of democracy. This chapter and Chapter 5 will look at the systems by which this preference for stability becomes homogenized and expressed to the governments of developing countries in search of capital. Focusing on two phenomena, investor organization (Chapter 4) and investor activism (Chapter 5), the argument will be made that investors have become better organized, more skilled, and bolder in communicating their expectations to developing markets. Moreover, as the amount of capital going into the hands of institutional investors increases, leverage over their prospective and current holdings increases. The systemic factors shaping emerging financial markets are understood through an examination of different levels of collaboration taking place within the international financial community. First, the shared belief in complying with neo-liberal tenets leads to the uniformity of doctrine adhered to by institutional investors. Secondly, goals particular to large investors impose another systemic constraint in which the profit-motive reigns supreme and is an important departure from the systemic constraints set by official development assistance.
KeywordsCorporate Governance Mutual Fund Institutional Investor Pension Fund Hedge Fund
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