Politics,Society and Financial Liberalization: Turkey in the 1990s

This article focuses on the political economy of Turkey in the 1990s to illustrate the importance of analysing economic variables that intersect with the quality of political democracy. In 1989, the debt‐ridden state moved to systematically and completely deregulate Turkey’s financial markets. Together with the ongoing processes of liberalizing commodity markets and integrating with global capital markets, financial liberalization was expected to achieve fiscal and monetary stability, stimulate business confidence to invest in productive sectors, produce stable growth, encourage privatization and control inflation. However, the new hegemony of the capital markets has gone hand‐in‐hand with deteriorating macroeconomic performance, a worsening income distribution, the discrediting of politics and its isolation from society. The authors examine several key dynamics which are helping to legitimate the neoliberal agenda of the 1990s. These include the distribution of state largesse to manipulate electoral capitalism; the rise of an informal sector in the ‘Anatolian Tigers’; promotion of the seductive attractions of the market; and an antipolitical reform populism adopted by political actors to exploit popular disillusionment with the political system.     

重新认识金融资本形成和资本输出的时间

本文批评了把商业资本主义、工业资本主义和金融资本主义作为资本主义发展循序渐进的三个阶段而不是资本主义三种形态的错误认识。通过翔实的经济史资料,本文说明随着欧洲大规模跨国商业和早期银行家的出现,金融资本和资本投资就随之出现。在近代资本主义的扩张中,资本输出很早就已开始,在英国,早在19世纪20年代,资本输出额就超过了商品输出额。     

Financialisation through Microfinance: Civil Society and Market-Building in India

Abstract

Microfinance does not reduce poverty, but it does successfully construct economic relations between owners of capital and borrowers of capital, allowing surpluses to accumulate through finance. It does so by drawing on the agency of financialised civil society actors who facilitate financialisation by working around the state to build new markets in finance and other goods. This article understands financialisation as the expansion of the frontier of financial accumulation. Microfinance is shown to achieve this expansion by establishing credit-based linkages between owners and borrowers of capital, allowing surplus accumulation to take place via the credit relation. Underlying this material relationship, there is also a level at which financialisation motivates and pressures civil society actors to bring microfinance to the poor. By becoming financialised agents themselves, civil society organisations act as conduits for an expansion of financial markets and the construction of new market relations for other goods. A case study of microfinance for water and sanitation in India shows in detail how this construction of markets via civil society works in practice, highlighting the pressures and opportunities presented by microfinance as a vehicle for building markets.     

Setting the rules: private power,political underpinnings,and legitimacy in global monetary and financial governance

The role of private market agents in global monetary and financial governance has increased as globalization has proceeded. This shift in both markets and patterns of governance has often been encouraged by states themselves in pursuit of liberalization policies. Much of the literature views these developments in a positive light, yet there are other aspects of these developments that also merit attention. This article supports its central propositions with two cases of emerging global financial governance processes: the Basel II capital adequacy standards for international banking supervision and the International Organization of Securities Commissions‐based transnational regulatory processes underpinning the functioning of cross‐border securities markets. Based on the case findings, the article argues first that private sector self‐regulation and/or public‐private partnership in governance processes can leave public authorities vulnerable to dependence on the information and expertise provided by private agents in a fast‐moving market environment. Policy in the vital domain of financial regulation has been increasingly aligned to private sector preferences to a degree that should raise fears of bureaucratic capture. Second, the article contends that the overall outcome in terms of global financial system efficiency and stability has been mixed, bringing a range of important benefits but also instability and crisis for many societies to a degree that has led to challenges to global governance itself. The case material indicates that the input, output and accountability phases of legitimacy in global monetary and financial governance are highly problematic, and much of the problem relates to the way in which private market agents are integrated into the decision‐making process. Third, the article posits that a better consideration of these three ‘phases’ of legitimacy and their interrelationships is likely to enhance the political underpinnings and legitimacy of global financial and monetary order.     

The Politics of an Emergent Global Regime for Controlling Tax Competition

This article probes what I call the emergent global regime for controlling tax competition. Since at least the early 1990s, states have perceived that competition for investment, whether through direct subsidies or tax incentives, threatens to undermine the fiscal underpinnings of the modern state, particularly in terms of its provision of social welfare programs. As states have provided financial or fiscal subsidies to capital (especially mobile capital), they have had to compensate through some combination of imposing higher levels of taxation on other actors, running higher deficits, and cutting spending. Each has shown itself to have substantial problems, and the response of states has now come full circle: to reconsider the competition for investment that causes the fiscal problems in the first place.     

Imperial Liberalism and Institution Building at the End of Empire in Africa

ABSTRACT

This article discusses political liberalism at the end of empire in British Africa through analysis of British ideas about institution building below the level of parliamentary democracies. It suggests that while processes of institution-building have largely been discussed through the prism of development, they also constitute fruitful sites for the exploration of British ideas about the nature of politically-liberal systems. I argue that new articulations of an imperial liberalism during decolonisation had an energising effect on some Britons within domestic institutions whose expertise was called upon to assist with the development of successor institutions in emergent states. As they engaged in a process of institution-building, these individuals acted in ways that were not only determined by Western liberalism, but also by distinctive British ideas of the appropriate relationship of institutions to the state. I suggest, however, that while their approach to institution building in emergent states reflected deep rooted convictions about the kind of institutions that were essential to the operation of politically liberal systems, these ideals were in tension with more self-interested concerns which could in practice compromise efforts to replicate British institutions.     

Financialization and Global Commodity Chains: Distributional Implications for Cotton in Sub‐Saharan Africa

Restructuring of global and local markets has led to an increased influence of commodity derivatives markets on commodity price setting. This has critical implications for price risks experienced by actors along commodity chains. Commodity derivatives markets have undergone significant changes that have been referred to as the ‘financialization of commodities’, which we define as an increase in trading activity by financial investors and the reorientation of business strategies by commodity trading houses towards risk management and financial activities. This article assesses how these global financialization processes affect commodity producers in low‐income countries via the operational dynamics of global commodity chains and national market structures. It investigates how prices are set and transmitted and how risks are distributed and managed in the cotton sectors in Burkina Faso, Mozambique and Tanzania. It concludes that uneven exposure to price instability and access to price risk management have important distributional implications. Whilst international traders have the capacity to deal with price risks through hedging, in addition to expanding their profit possibilities through financial activities on derivatives markets, local actors in producing countries face the challenge of increased short‐termism — albeit to different extents depending on national market structures — with limited access to risk management.     

The US Dollar's Continuing Hegemony as an International Currency: A Double‐matrix Analysis

The standard framework for debating the international currency system casts doubt on the dollar's continuing hegemonic position because it raises questions regarding the ability of the US to finance its external liabilities in the face of worsening economic fundamentals. This article addresses these questions by adding to the usual matrix linking the international functions of money to two different types of agents, private and official, a second matrix linking the functions of money to two different types of commodities, material goods and services on the one hand, and financial securities on the other. Once it is understood that bonds and equities are now not only different types of funding instruments but also different types of commodities whose use value to the world's large investors is to serve as stores of value, it is possible to understand why the size of the US capital markets will long continue to bind foreign investors to the dollar because it will be some time before other capital markets will reach a comparable size.     

Bingo or fiasco? The global financial situation is not guaranteed

The 1998 Russian debt default following the Asian financial crisis sent a signal to global capital markets that no country from now on could be seen as 'too big to fail'. The concern which followed Russia's crisis raised two questions: first, with regard to the relevance of the interest rate in the presence of highly lever-aged securities; and second, over the question of the protection of a country or institution from bankruptcy while simultaneously making sure that any rescue would not encourage either further risk-taking from investors or more badly managed policies from emerging market economies. Moreover, the moral hazard question, coupled with the sheer size of private capital flows, led international institutions to consider involving the private sector in solving financial crises. This article describes why a situation has now been reached where no future guarantee can be given to countries or financial institutions, implicitly or explicitly, that their debts will be bailed out.     

States, Markets and Governance for Emerging Market Economies: Private Interests, the Public Good and the Legitimacy of the Development Process

States, markets, and governance are among the pressing issues of our day. The global market exerts dynamic pressures on our societies, economic agents, and systems of government, especially in the developing world. Typically, most analysis begins with the idea that global markets have increasingly intruded upon the capacity of the institutions of government to manage the process of change. Our societies are seen as increasingly subject to the vagaries of market forces, to the delight of some and the regret of others.
This article argues that much thinking about states and markets is flawed, making it highly likely that policy-makers, among others, will commit mistakes in their responses to the undoubted pressures for change. If we alter the way we think about the state and the market, we will see opportunities to change what we do about them and how they evolve over time. The article argues that we should retreat from understandings of the market and governance that involve a clear distinction between states and markets, proposing a radical reformulation wherein states and markets are no longer seen as separate entities, but as a state-market 'ensemble of governance', or 'condominium'. Drawing on Adam Smith, this approach leads to a reinterpretation of the relationship between private interests in market processes and the wider public good. This model is used to interpret contemporary patters of global trade and finance, and the article concludes that this new way of thinking can help us to realise better our normative preferences about the sort of world in which we wish to live.     

Australian Capital City Property Development,Foreign Investment and Investor Attitudes

Recently there has been a substantial change in the role of foreign investment in urban property development in Australia. Now, about 50% of foreign investment each year is directed to urban property sectors, with Asian investors accounting for approaching 50% of this investment. This trend has coincided with the re-emergence of the property development sector from the trough of a recession in the early 1970s to something approaching a boom in the last two to three years. While there are considerable variations in the performance and prospects of the various capital city property markets, Australia is seen in general terms as being a favourable place for foreign investment in urban property development, particularly as a destination for long term equity investment. This paper examines recent trends in capital city property markets in Australia, and in particular the increasing importance of foreign investors. It also discusses the results of a national survey of property developers, investors and intermediaries, and investors, both local and foreign, and reports on their attitudes towards the various capital city property markets, and their investment behaviours. Attitudes towards the Foreign Investment Review Board (FIRB) guidelines and controls are examined, and it is suggested that there is room for further substantial deregulation to encourage direct foreign investment in Australian urban property development.     

A good international citizen? Australia at the World Summit on Sustainable Development

Australia has often been identified as a middle power in foreign policy terms. This article assesses the worth of the concept in understanding the role of Australia in global environmental governance. Using a case study of the role played at the World Summit on Sustainable Development, it assesses whether Australia conformed to a classic middle power role, building coalitions as a ‘good international citizen’ or whether its role was more like a veto state, preventing positive change. This is done via a reflection of Australia's Summit priorities and an assessment of its impact over the Summit outcomes. The article shows that Australia was able to offer leadership in certain specific areas, but overall domestic policy preferences, a growing mistrust of multilateralism, and a strong defence of the national interest meant that Australia played the role of a veto state, often in coalition with the United States of America.     

Absent Regions: Spaces of Financialisation in the Arab World

This paper examines processes of financialisation in the Arab world, a region that has been almost completely absent from the wider financial literature. The paper shows that financialisation is much more than simply the expansion of financial markets within neatly bounded sets of social relations operating at the national scale. In the Arab world, financialisation has been marked by the growing weight of regional finance capital—most specifically, those capital groups based in the Gulf Cooperation Council—in circuits of capital operating at all scales. This has important implications for processes of class and state formation. Approaching financialisation in this manner—moving away from methodologically nationalist assumptions and the literature's largely singular focus on the advanced capitalist core—brings into focus the significance of cross‐scalar accumulation patterns, their spatial hierarchies, and geographic unevenness. The paper thus reaffirms the need for a more spatially sensitive approach to financialisation.     

Taming Foreign Exchange Derivatives Markets? Speculative Finance and Class Relations in Brazil

This article provides a critical interrogation of the Brazilian tax on foreign exchange derivatives deployed between 2011 and 2013. It analyses the drivers of the policy‐making process that led to implementation of the measure, locates it within the broader policy response regarding the management of cross‐border capital flows and speculative finance, and assesses its political economy significance in light of class dynamics. The author makes three arguments. First, this innovative policy tool must be interpreted in terms of the emergence of a specific form of state power allowing for the continuation of finance‐led strategies of accumulation, while mitigating some of their worst consequences. Second, this form of state power internalizes the subordinate positionality of Brazil in the global financial and monetary system. Third, while financialization processes have eroded the efficiency of a number of policy tools, this policy experiment demonstrates the possibility of regulating complex financial markets, provided that appropriate resources are dedicated to the task, and that there is the political will to do so. The article concludes by discussing theoretical implications, for how to theorize state and financialization, as well as political implications.     

Governing Homo Subprimicus: Beyond Financial Citizenship,Exclusion, and Rights

The paper presents an alternative to scholarship on the distributional politics of finance that emphasizes citizenship‐based claims to new financial rights. To compensate for the dominance of exclusion‐based etiologies of financial marginality in financial geography, I reframe financial exclusion as a problem of financial government—that is, as a problem of conducting the conduct of risky populations without threatening the security and autonomy of financial markets. Drawing on Foucault's distinction between technologies of discipline and security, I describe how barriers to the extension of financial government create tiered processes of financial subject formation. The inchoate “subprime’ financial subject produced is the correlate of a specialized financial governmentality—a homo subprimicus eminently governable by financial means. I close by calling for greater attention to questions regarding the relationship between technologies for valorizing bare life, new systems of financially mediated value extraction, and emerging capitalist class processes.     

Marginality and the New Geography of Domestic Violence Policy in Post-Communist Poland

The article explores the spatial distribution and institutional geography of domestic violence service provision in post-communist Poland. A new institutional geography providing services to victims of domestic violence is emerging in Poland as a result of NGO activism and new pro-woman policies implemented by the state. NGOs, often in partnership with local governments, are the most vital means of service provision in large and medium size cities, while in rural areas, public agencies predominate in the institutional geography of service provision. The assumption that NGOs will emerge to address the needs of victims of domestic violence is not realistic in rural areas. While urban Poland is developing an institutional geography to address domestic violence, state and NGO activists must focus on shrinking the rural margins of Poland's institutional geography.     

The Interregnum: The South's Insecurity Dilemma

Abstract. This article investigates the ‘insecurity dilemma’ facing many Third World states arising from the fact that multiple ethnic communities reside within their borders. In terms of analysing the types of states that exist in the ‘South’, much of the literature on this phenomenon serves to confuse the various elements of state power and, therefore, the reasons for the existence and persistence of internal threats to Third World states. It is posited that the ‘insecurity dilemma’ has three possible sources: a lack of coercive means by the state for imposing its rule; a deficient infrastructure; and a lack of legitimacy. In examining the persistence of the ‘insecurity dilemma’ the article focuses on the third dimension of state power and the possible diminution of challenges from ethnic communities within a state's borders via the process of nation-building. The possibility that it will only be a matter of time before the embryonic states of the South will emulate the success of European states in achieving some degree of domestic consensus is highly questionable when the processes of nation-building are examined, for two reasons. Firstly, the emphasis placed on ‘modernisation’– infrastructural development and state imposition of a national ‘high’ culture – may be misplaced. Secondly, because of their peripheral status in the world economy the assimilative tendencies associated with ‘modernisation’ may take an extremely long time in arriving.     

Extracting Value from the City: Neoliberalism and Urban Redevelopment

How do states make the built environment more flexible and responsive to the investment criteria of real estate capital? Spatial policies, such as urban renewal funding for slum clearance or contemporary financial incentives, depend on discursive practices that stigmatize properties targeted for demolition and redevelopment. These policies and practices have become increasingly neoliberalized. They have further distanced themselves from those “long turnover” parts of the city where redevelopment needs are great but where the probability of private investment and value extraction is slight. They have become more entwined in global financial markets seeking short–term returns from subsidized property investments. They have shifted their emphasis from compromised use values (embodied in the paternalistic notion of “blight”) to diminished exchange values (embodied in the notion of “obsolescence”). I argue that obsolescence has become a neoliberal alibi for creative destruction and, therefore, an important component in contemporary processes of spatialized capital accumulation.     

Who needs a review of the financial system in Australia? the case of the Wallis inquiry

The Howard government reoriented the then existing institutionally based financial regulation towards a functionally based regime with new prudential and disclosure regulators in 1998. This paper uses the governmental agenda-setting framework of John Kingdon to explain this financial regulatory change undertaken in Australia following the Wallis Inquiry of 1996. It also examines the role of the Inquiry in the policy process. It shows that the financial regulatory change was on the bureaucratic agenda of the Treasury Department. A window of opportunity opened for the Treasury following the 1996 election, with the new Howard government keen to achieve financial regulatory reforms to address future regulatory challenges proactively while the new Treasurer Peter Costello wanted to consolidate his power within markets and politics. Costello coupled the Treasury's solutions to problems and to political processes. The Wallis Committee was ‘packed’ by the government in accordance with its regulatory policy preferences. Its role was to legitimise the government's policy preferences publicly, and to transfer the ‘governmental agenda’ into the ‘public agenda’. However, this was not a case of the government pressuring for its policy preferences over the financial services industry. In fact, the Inquiry was used as a venue to generate industry and public support for the regulatory changes, and was used to build a network of alliances within and outside the parliament.     

The Sino-centric Capital Export Regime: State-backed and Flexible Capital in the Philippines

There is an ongoing debate as to whether Chinese capital can be described as developmental. While some argue that Chinese capital is simply a tool of the Chinese state to exploit the global South, others claim that Chinese capital opens new development opportunities. Rather than advancing a framework based upon either an exploitative or an egalitarian mode of development, this article argues that China's current crisis of overaccumulation has led to a so-called Sino-centric capital export regime, which sends out two types of capital to the global South. First, state-backed capital imposes a development model by modifying ‘local orders’, attempting to make host states legible by creating maps of peoples and terrains that surround China. These maps aim to improve China's ability to manage inter-state disputes. Second, flexible capital is interested in extricating itself from the conditions imposed on it in China. By moving into the global South, flexible capital breaks through the barriers placed by the Chinese state. As a by-product of this quest for extrication, flexible capital can generate new venues of accumulation and novel ways of organizing production. This article demonstrates these two types of capital using examples from Rodrigo Duterte's Philippines — the Kaliwa Dam project and online gambling — drawing on original field research and a newly generated dataset.