Capital Ideas: The IMF and the Rise of Financial Liberalization

Economic sociologists and political economists must not stop their research at the stage of analyzing the policy and its implications, but rather must go deeper and examine how decisions are made within governance bodies and policy making organizations on national and global levels. They must open this black box of the evolution of thinking and inner workings.
Capital Ideas: The IMF and the Rise of Financial Liberalization by Jeffrey Chwieroth does this mission superbly, by tracing the development of the IMF’s approach to capital controls from the 1940s through spring 2009 and the first stages of the subprime credit crisis. It shows that IMF staff vigorously debated the legitimacy of capital controls and that these internal debates eventually changed the organization’s behavior, despite the lack of major rule changes. He also shows that the IMF exercised a significant amount of autonomy despite the influence of member states. Normative and behavioral changes in international organizations, Chwieroth concludes, are driven not just by new rules but also by the evolving makeup, beliefs, debates, and strategic agency of their staffs. (Open access to the chapter one)