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|Title:||Sources and legitimacy of financial liberalization|
Demetriades, Panicos O.
Underhill, Geoffrey R. D.
|Citation:||European Journal of Political Economy, 2012, 28 (2), pp. 147-161.|
|Abstract:||This article seeks to clarify how we understand domestic and international sources of globalization and specifically how we explain financial liberalization across countries. The article also develops our understanding of the underlying legitimacy of financial liberalization. We debate e.g. Abiad and Mody (2005) and others who have found political factors to have little impact on financial openness. Using the same data undergirding such conclusions we argue, in contrast, that even a slight broadening of the political variables employed in the model and much closer attention to “input” and “output” aspects of the political legitimacy of financial liberalization over time reveal a more central role for politics in shaping liberalization. Input legitimacy involves the representation of stakeholders in initial and ongoing decisions to liberalize, while “output” legitimacy concerns liberalization's distributional consequences and management thereof over time. Several empirical measures of domestic-national and international political factors plausibly influence such aspects of legitimacy and are found to play a significant role in shaping liberalization, suggesting legitimation politics to be more important to financial openness than existing studies have typically acknowledged.|
|Rights:||Copyright © 2011 Elsevier. Deposited with reference to the publisher's archiving policy available on the SHERPA/RoMEO website. NOTICE: this is the author’s version of a work that was accepted for publication in European Journal of Political Economy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in European Journal of Political Economy, 2012, 28 (2), pp. 147-161, DOI: 10.1016/j.ejpoleco.2011.10.003|
|Appears in Collections:||Published Articles, Dept. of Economics|
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