International financial subordination: a critical research agenda

Alami, Ilias; Alves, Carolina; Bonizzi, Bruno; Kaltenbrunner, Annina; Kodddenbrock, Kai; Kvangraven, Ingrid Harvold; Powell, Jeff

doi:10.1080/09692290.2022.2098359

Cited by 74 publications

(49 citation statements)

References 84 publications

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“…If capital flows are not a precondition for local credit creation, how do they affect geographically uneven dynamics? One branch of the heterodox literature discusses the ‘international financial subordination’ of countries in the Global South and highlights the speculative and volatile nature of short-term capital flows (Alami et al, 2022; Alami, 2018; Bonizzi and Kaltenbrunner, 2018; Bortz and Kaltenbrunner, 2017; Fernandez and Aalbers, 2019; de Paula et al, 2020). Due to their lower position in the international currency hierarchy, currencies of economies in the Global South carry lower liquidity premia than currencies that fulfil international money functions like the US dollar.…”

Section: Capital Flows Trade Imbalances and Geographically Uneven Fin...mentioning

confidence: 99%

“…Such cycles were characterised by large capital inflows, soaring economic activity, and widening current account deficits during booms; and external deleveraging and oftentimes currency crashes during busts. A more recent literature puts forward the notion of ‘international financial subordination’ (Alami et al, 2022). In this view, financialisation takes a ‘subordinate’ form in the Global South due to its relatively low position in the international currency hierarchy.…”

Section: Introductionmentioning

confidence: 99%

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Capital flows and geographically uneven economic dynamics: A monetary perspective

Köhler

2022

Environ Plan A

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This paper provides a monetary perspective on capital flows and their effects on geographically uneven economic dynamics. Contributing to debates on global imbalances and the international dimension of financialisation, the paper applies heterodox theories of endogenous money creation, asset pricing, and balance sheet fragility to capital flows across regions. Three theoretical claims are made and illustrated through coherent balance-sheet accounting and empirical examples. First, trade imbalances usually are financed endogenously by net inflows that need not originate from surplus regions. Second, bank inflows are not a precondition for local credit creation, but certain types of gross financial flows can contribute to destabilising financial booms through exchange rate appreciation and asset price inflation. Third, sudden stops in capital flows can be entirely unrelated to current account deficits but may trigger financial instability, resulting in negative gross flows rather than increased outflows. For debates in economic geography and heterodox economics, the arguments imply that the focus on surplus countries as originators of destabilising flows can be misleading and that global financial centres are likely to be more important. More attention is needed to gross portfolio and FDI flows into asset markets rather than bank flows and net flows.

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Section: Capital Flows Trade Imbalances and Geographically Uneven Fin...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Capital flows and geographically uneven economic dynamics: A monetary perspective

Köhler

2022

Environ Plan A

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“…Our analysis contributes to the literature on the structural power of finance by shedding light on structural power in underresearched DEE settings. 9 Moreover, our article highlights the need to reconceptualize structural power by reassessing its basis, in a context of intensifying external (i.e., global) and internal (i.e., domestic) financialization. Furthermore, our article highlights the agency, albeit subordinated, of DEE policymakers in responding to material pressures for economic development.…”

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confidence: 95%

Domestic Bank Reform and the Contingent Nature of the Structural Power of Finance in Emerging Markets

Dafe¹,

Rethel

2022

Politics & Society

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This article examines the structural power of domestic finance in developing and emerging economies (DEEs) in the context of a shift toward increasingly activist financial development planning and financial sector reform. Focusing on efforts to create large, internationally competitive banks in Malaysia and Nigeria dating to the late 1990s and early 2000s, it highlights that banks have not played their envisaged role in financing structural transformation via industrial growth and economic development. Nonetheless, (large) banks in DEEs have attained considerable structural power over financial policy, supporting their ability to shape growth and investment strategies. Therefore, the article proposes a revised model of the structural power of finance, recognizing its contingent nature. States pursue various forms of financialization both as a substitute to, or in conjunction with, industrial policy. Financialized development strategies enhance the structural power of large banks in DEEs, notwithstanding their limited role in meeting the investment/development imperative.

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“…This is taking place alongside a more general concern with the differential constraints posed by the global financial system on peripheral states (e.g. Alami, 2018a, 2018b; Alami et al., 2022; Kaltenbrunner and Painceira, 2018). Postcolonial governments often have limited control over fiscal and monetary policy, both of which are strongly subjected to the imperatives of metropolitan financial capital.…”

Section: Introductionmentioning

confidence: 99%

“…Thus, while monetary relations are an important basis of what Mann (1984) calls the ‘infrastructural power’ of the state, states also depend in basic, material terms on fostering continued capital accumulation (see Copley and Moraitis, 2021). Second, money is multi‐scalar, and relationships between ‘national’ and ‘world money’ enable and constrain state action in different ways, particularly for peripheral territories (see Alami et al., 2022). Looking at how these contradictions have played out historically helps to make sense of the reproduction of colonial financial dynamics in decolonizing West Africa.…”

Section: Introductionmentioning

confidence: 99%

States, Money and the Persistence of Colonial Financial Hierarchies in British West Africa

Bernards¹

2022

Development and Change

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This article contributes to debates about the persistence of colonial hierarchies in global finance by examining the reproduction of key features of colonial monetary and financial systems through the end of formal colonialism in West Africa, with a focus on Ghana. The article draws together engagements with Marxian theories of money and of the colonial state, and an examination of a key period which has often not received sufficient direct attention in debates about colonialism and financial subordination: the breakdown and end of formal colonial rule, roughly between 1930 and 1960. The central puzzle addressed in this article is how, despite the explicit desire on the part of nationalist political leaders to overturn colonial financial systems, these wound up being reproduced through the negotiation of political independence. The article shows how the entanglements of colonial monetary and financial systems with processes of state formation posed severe limits on efforts to articulate a ‘developmental’ colonialism after World War II. Efforts to work around these limits ultimately reinforced the reliance of the colonial and postcolonial state on extractive and hierarchical structures of global finance. In short, the article shows how the contradictory position of the state in colonial capitalism is vital to understanding the persistence of colonial monetary and financial structures.

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International financial subordination: a critical research agenda

Cited by 74 publications

References 84 publications

Capital flows and geographically uneven economic dynamics: A monetary perspective

Capital flows and geographically uneven economic dynamics: A monetary perspective

Domestic Bank Reform and the Contingent Nature of the Structural Power of Finance in Emerging Markets

States, Money and the Persistence of Colonial Financial Hierarchies in British West Africa

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