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Capital controls in China, Brazil and India: towards the end of the free movement of capital as a global norm?

Sacha Dierckx (UGent)
(2014)
Author
Promoter
(UGent)
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Abstract
This dissertation examines whether China, Brazil and India will form a challenge to the Western-made neoliberal norm of the free movement of capital across borders. From a neo-Gramscian perspective, it is argued that capital account liberalization has been a crucial element of the neoliberal project. By allowing the transnationalization of productive and financial capital, it has transformed the power relations between labour and capital to the advantage of the latter. As such, a study on the policies and perspectives of China, Brazil and India with regard to capital account policies, can shed light on the broader debate whether these rising powers will challenge the US-led, Western-made neoliberal world order. An in-depth analysis of these countries’ respective capital control policies, in connection with their domestic constellation of social forces and prevailing accumulation regime, leads to the following conclusions. First, these countries do not seem to form a challenge to the norm of the free flow of capital. All three the countries have liberalized to a considerable extent, they all see the full free movement of capital as a final objective, and the dominant social forces in their social formation are not in favour of a substantial closure of the capital account. Second, however, these countries are more pragmatic and flexible with regard to cross-border capital flows, and do not want to give up on their autonomy to hold on to or reintroduce capital controls. They have therefore also contested the institutionalization of the norm of the free movement of capital at the International Monetary Fund. If the issue of capital account policies is indeed representative of the position of China, Brazil and India regarding the neoliberal world order, then this dissertation indicates that although these rising powers might be able to obtain more policy space and allow for more diversity within a global neoliberal context, they do not form a fundamental challenge to this world order. In the absence of major domestic transformations in China, Brazil and India, and/or similar transformations in the West, the neoliberal world order is therefore likely to survive the ongoing power shift to the Global South.
Keywords
neoliberalism, neo-Gramscian, IPE, International Political Economy, emerging markets, rising powers, China, India, Brazil, Capital controls, BICs

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Citation

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Chicago
Dierckx, Sacha. 2014. “Capital Controls in China, Brazil and India: Towards the End of the Free Movement of Capital as a Global Norm?” Ghent, Belgium: Ghent University. Faculty of Political and Social Sciences.
APA
Dierckx, Sacha. (2014). Capital controls in China, Brazil and India: towards the end of the free movement of capital as a global norm? Ghent University. Faculty of Political and Social Sciences, Ghent, Belgium.
Vancouver
1.
Dierckx S. Capital controls in China, Brazil and India: towards the end of the free movement of capital as a global norm? [Ghent, Belgium]: Ghent University. Faculty of Political and Social Sciences; 2014.
MLA
Dierckx, Sacha. “Capital Controls in China, Brazil and India: Towards the End of the Free Movement of Capital as a Global Norm?” 2014 : n. pag. Print.
@phdthesis{5762914,
  abstract     = {This dissertation examines whether China, Brazil and India will form a challenge to the Western-made neoliberal norm of the free movement of capital across borders. From a neo-Gramscian perspective, it is argued that capital account liberalization has been a crucial element of the neoliberal project. By allowing the transnationalization of productive and financial capital, it has transformed the power relations between labour and capital to the advantage of the latter. As such, a study on the policies and perspectives of China, Brazil and India with regard to capital account policies, can shed light on the broader debate whether these rising powers will challenge the US-led, Western-made neoliberal world order. An in-depth analysis of these countries{\textquoteright} respective capital control policies, in connection with their domestic constellation of social forces and prevailing accumulation regime, leads to the following conclusions. First, these countries do not seem to form a challenge to the norm of the free flow of capital. All three the countries have liberalized to a considerable extent, they all see the full free movement of capital as a final objective, and the dominant social forces in their social formation are not in favour of a substantial closure of the capital account. Second, however, these countries are more pragmatic and flexible with regard to cross-border capital flows, and do not want to give up on their autonomy to hold on to or reintroduce capital controls. They have therefore also contested the institutionalization of the norm of the free movement of capital at the International Monetary Fund. If the issue of capital account policies is indeed representative of the position of China, Brazil and India regarding the neoliberal world order, then this dissertation indicates that although these rising powers might be able to obtain more policy space and allow for more diversity within a global neoliberal context, they do not form a fundamental challenge to this world order. In the absence of major domestic transformations in China, Brazil and India, and/or similar transformations in the West, the neoliberal world order is therefore likely to survive the ongoing power shift to the Global South.},
  author       = {Dierckx, Sacha},
  language     = {eng},
  pages        = {XII, 336},
  publisher    = {Ghent University. Faculty of Political and Social Sciences},
  school       = {Ghent University},
  title        = {Capital controls in China, Brazil and India: towards the end of the free movement of capital as a global norm?},
  year         = {2014},
}