Economic crisis, global financial cycles, and state control of finance: public development banking in Brazil and South Africa

Naqvi, Natalya ORCID: 0000-0003-0821-070X (2022) Economic crisis, global financial cycles, and state control of finance: public development banking in Brazil and South Africa. European Journal of International Relations. ISSN 1460-3713

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Abstract

In the aftermath of recent crisis, national governments across the global south increasingly see state ownership and control of finance as a vital public policy tool. What explains variation in state control of finance in the wake of crisis? Interventionist policies can elicit disinvestment or exit threats from private financial actors if they limit profitability. When disinvestment threats are credible, policymakers may rule out reform for fear of devastating economic consequences. I argue that the credibility of disinvestment threats is conditioned by two key variables, the resilience of the national economy to capital flight, which affects the level of damage capital flight will inflict, and global financial liquidity, which can be used to undercut domestic disinvestment threats. These arguments are developed through comparative case studies of cross-national and over-time variation in the scale and scope of public development banking in Brazil and South Africa in the wake of the 2008 crisis.

Item Type:	Article
Official URL:	https://journals.sagepub.com/home/ejt
Additional Information:	© 2022 The Author
Divisions:	International Relations
Subjects:	J Political Science > JF Political institutions (General) H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G0 - General > G00 - General F - International Economics > F3 - International Finance > F30 - General
Date Deposited:	04 Aug 2022 07:24
Last Modified:	18 Apr 2024 01:15
URI:	http://eprints.lse.ac.uk/id/eprint/115781

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