Capital Account Regulations for Stability and Development
A New Approach
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In the wake of the financial crisis numerous emerging market and developing countries have been deploying what have traditionally been referred to as ‘capital controls’ to curb excessive speculation on their currencies and domestic assets. In response to those efforts, French President Nicholas Sarkozy called on the International Monetary Fund to develop a set of guidelines for the use of capital controls. The goal is for the President to present such guidelines at the G-20 Summit in Cannes this year. The IMF has published a preliminary set of guidelines to that end. This policy brief provides a critical review of those guidelines and offers an alternative protocol for a development friendly-approach to capital account regulation.
In this policy brief, the co-conveners of the Pardee Center Task Force on Managing Capital Flows for Long-Run Development argue that capital account regulations (CARs) should be viewed as an essential tool in the macroeconomic policy toolkit. Based on discussions that occurred at the Task Force meeting in September 2011, the authors present an alternative set of guidelines for how and when CARs should be employed, and call for international financial institutions and international trade agreements to ensure that policy space remains available to allow developing countries to employ CARs when deemed necessary for financial stability and economic development.
A detailed report of the discussions and recommendations stemming from the Task Force meeting will be published by the Pardee Center in 2012. The Task Force was convened by Boston University’s Pardee Center in collaboration with the Initiative for Policy Dialogue at Columbia University, and the Global Development and Environment Institute at Tufts University.
About the Authors
Kevin Gallagher
Research Fellow/ Associate Professor of International Relations
The Frederick S. Pardee Center for the Study of the Longer-Range Future
Boston University
Stephany Griffith-Jones
Financial Markets Program Director
Initiative for Policy Dialogue
Stephany Griffith-Jones is Financial Markets Program Director at IPD, as well as an economist whose areas of expertise include global capital flows to emerging markets and international financial reform; macro-economic management of capital flows in Latin America, Eastern Europe and sub-Saharan Africa; and international financial reform with special emphasis on regulation (Basel II, hedge funds and derivatives). Prior to joining IPD, Professor Griffith-Jones was Professorial Fellow at the Institute of Development Studies at University of Sussex and served as Senior Official at the United Nations Department of Economic and Social Affairs and the Economic Commission of Latin America (ECLAC), and as Head of International Finance at the Commonwealth Secretariat. She has acted as senior consultant to governments in Eastern Europe and Latin America and to many international agencies, including the World Bank, the Inter-American Development Bank, and the United Nations (especially UNDP and ECLAC). She began her career at the Central Bank of Chile and since then has published many articles and books including International Finance and Development with Jose Antonio Ocampo and Jan Kregel. She received the Association of Latin American Financial Institutions prize for best essay on Latin America's international finance.
José Antonio Ocampo
Professor of International and Public Affairs
School of International and Public Affairs
Columbia University
Jose Antonio Ocampo is Co-President of IPD, Professor of Professional Practice in the School of International and Public Affairs, and Fellow of the Committee on Global Thought at Columbia University. Prior to his appointment at Columbia, Professor Ocampo served as the United Nations Under-Secretary-General for Economic and Social Affairs, and head of UN Department of Economic and Social Affairs (DESA), as Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has held a number of high-level posts in the Government of Colombia, including Minister of Finance and Public Credit, Director of the National Planning Department, and Minister of Agriculture . Professor Ocampo is author or editor of over 30 books and has published over 200 scholarly articles on macroeconomic theory and policy, international financial issues, economic development, international trade, and Colombian and Latin American economic history.
Publication Information
| Type | Policy Briefs |
| Program | Financial Markets Reform |
| Download | 518kb pdf |
| Posted | 10/27/11 |
