Financial Liberalization, International Monetary Dis/Order, and the Neoliberal State

Abstract:     
This article started as a plenary paper that was presented to the annual International Economic Law conference of the American Society of International Law. The conference itself posed the question of whether the new international economic order was leading to greater peace, stability, fairness and justice. At a time when American post-Cold War triumphalism was perhaps at its zenith, Canova answered with an unequivocal indictment of the global order for failing to deliver peace or justice.

The first part of the article critiques the international monetary system, and argues that the primary negative consequence of capital liberalization is the undermining of the public sector. Free portfolio capital flows constitute an undemocratic check on once-sovereign nation-states to pursue progressive social and economic policies. Neoliberal capital goes hand in hand with a neoliberal state with declining capabilities to provide for the public safety and general welfare.

Part two of the article analyzes the relationship between central bank autonomy, another institutional pillar of the new world order, and questionable economic assumptions, dubious constitutional foundations, and flawed historical narratives that constrain discussion of alternative models.

The final part of the article considers alternative futures and paths of globalization.

Number of Pages in PDF File: 43

Keywords: International Monetary Fund, World Bank, Financial Liberalization

JEL Classification: B20, E12, E40, E50, E60, F30, N20, P10, E42, F32

Accepted Paper Series