Perspectives on global finance

Members of the Global Finance Initiative steering committee have published numerous pieces of scholarship on finance. Below are examples of recent monographs, arranged by academic field. 

 

AnthropologyArbitraging Japan Book Cover

Arbitraging Japan
Hirokazu Miyazaki

For many financial market professionals worldwide, the era of high finance is over. The times in which bankers and financiers were the primary movers and shakers of both economy and society have come to an abrupt halt. What has this shift meant for the future of capitalism? What has it meant for the future of the financial industry? What about the lives and careers of financial operators who were once driven by utopian visions of economic, social, and personal transformation? And what does it mean for critics of capitalism who have long predicted the end of financial institutions? Hirokazu Miyazaki answers these questions through a close examination of the careers and intellectual trajectories of a group of pioneering derivatives traders in Japan during the 1990s and 2000s.

 

Economy of Words
Douglas R. Holmes

Markets are artifacts of language—so Douglas R. Holmes argues in this deeply researched look at central banks and the people who run them. Working at the intersection of anthropology, linguistics, and economics, he shows how central bankers have been engaging in communicative experiments that predate the financial crisis and continue to be refined amid its unfolding turmoil—experiments that do not merely describe the economy, but actually create its distinctive features.
 
Holmes examines the New York District Branch of the Federal Reserve, the European Central Bank, Deutsche Bundesbank, and the Bank of England, among others, and shows how officials there have created a new monetary regime that relies on collaboration with the public to achieve the ends of monetary policy. Central bankers, Holmes argues, have shifted the conceptual anchor of monetary affairs away from standards such as gold or fixed exchange rates and toward an evolving relationship with the public, one rooted in sentiments and expectations. Going behind closed doors to reveal the intellectual world of central banks, Economy of Words offers provocative new insights into the way our economic circumstances are conceptualized and ultimately managed. Enacting the Corporation Book Cover

Enacting the Corporation
Marina Welker

What are corporations, and to whom are they responsible? Anthropologist Marina Welker draws on two years of research at Newmont Mining Corporation’s Denver headquarters and its Batu Hijau copper and gold mine in Sumbawa, Indonesia, to address these questions. Against the backdrop of an emerging Corporate Social Responsibility movement and changing state dynamics in Indonesia, she shows how people enact the mining corporation in multiple ways: as an ore producer, employer, patron, promoter of sustainable development, religious sponsor, auditable organization, foreign imperialist, and environmental threat. Rather than assuming that corporations are monolithic, profit-maximizing subjects, Welker turns to anthropological theories of personhood to develop an analytic model of the corporation as an unstable collective subject with multiple authors, boundaries, and interests. Enacting the Corporation demonstrates that corporations are constituted through continuous struggles over relations with—and responsibilities to—local communities, workers, activists, governments, contractors, and shareholders.

 

EconomicsInternational Development Book Cover

International Development: Ideas, Experience, & Prospects
Edited by Bruce Currie-Alder, Ravi Kanbur, David D. Malone, and Rohinton Medhora

Thinking on development informs and inspires the actions of people, organizations, and states in their continuous effort to invent a better world. This volume examines the ideas behind development: their origins, how they have changed and spread over time, and how they may evolve over the coming decades. It also examines how the real-life experiences of different countries and organizations have been inspired by, and contributed to, thinking on development. The extent to which development 'works' depends in part on particular local, historical, or institutional contexts. General policy prescriptions fail when the necessary conditions that make them work are either absent, ignored, or poorly understood. There is a need to grasp how people understand their own development experience. If the countries of the world are varied in every way, from their initial conditions to the degree of their openness to outside money and influence, and success is not centred in any one group, it stands to reason that there cannot be a single recipe for development.

 

Urbanisation in India
Edited by Isher Judge Ahluwalia, Ravi Kanbur, P.K. Mohanty

Urban areas are integral to India’s growth and development, accounting for around two-thirds of the country’s GDP. Analysing India’s rapidly expanding process of urbanisation, the book identifies the key challenges and opportunities and proposes suitable managerial and policy reforms. It addresses critical issues and puts forth suggestions for better planning financing alternatives and, most importantly, better governance for improved service delivery and affordable housing. Divided thematically into three sections, the volume takes into account the important facets of urbanisation, including the state of urban infrastructure and planning in India with due attention to sustainability, the role of finance in urban development and its dependence on governance, and  methods to generate good governance in public institutions, and the impact on housing and climate change.

The 11 essays included in this book have been written by leading analysts and practitioners, who propose critical reforms and policy interventions. The volume will be indispensable to students and scholars of urban economics, development studies, urban planning, business practitioners, policymakers as well as the informed general reader.

 

HistorySecret Trades, Porous Borders Book Cover

Secret Trades, Porous Borders
Eric Tagliacozzo

Over the course of the half century from 1865 to 1915, the British and Dutch delineated colonial spheres, in the process creating new frontiers. This book analyzes the development of these frontiers in Insular Southeast Asia as well as the accompanying smuggling activities of the opium traders, currency runners, and human traffickers who pierced such newly drawn borders with growing success.

The book presents a history of the evolution of this 3000-km frontier, and then inquires into the smuggling of contraband: who smuggled and why, what routes were favored, and how effectively the British and Dutch were able to enforce their economic, moral, and political will. Examining the history of states and smugglers playing off one another within a hidden but powerful economy of forbidden cargoes, the book also offers new insights into the modern political economies of Southeast Asia.

 

LawCollateral Knowledge Book Cover

Collateral Knowledge
Annelise Riles

Who are the agents of financial regulation? Is good (or bad) financial governance merely the work of legislators and regulators? Here Annelise Riles argues that financial governance is made not just through top-down laws and policies but also through the daily use of mundane legal techniques such as collateral by a variety of secondary agents, from legal technicians and retail investors to financiers and academics and even computerized trading programs.     

Drawing upon her ten years of ethnographic fieldwork in the Japanese derivatives market, Riles explores the uses of collateral in the financial markets as a regulatory device for stabilizing market transactions. How collateral operates, Riles suggests, is paradigmatic of a class of low-profile, mundane, but indispensable activities and practices that are all too often ignored as we think about how markets should work and be governed.  Riles seeks to democratize our understanding of legal techniques, and demonstrate how these day-to-day private actions can be reformed to produce more effective forms of market regulation.Rethinking Sovereign Debt Book Cover

Rethinking Sovereign Debt
Odette Lienau

Conventional wisdom holds that all nations must repay debt. Regardless of the legitimacy of the regime that signs the contract, a country that fails to honor its loan obligations damages its reputation, inviting still greater problems down the road. Yet difficult dilemmas arise from this assumption. Should today’s South Africa be responsible for apartheid-era debt? Is it reasonable to tether postwar Iraq with Saddam Hussein’s excesses?

Rethinking Sovereign Debt is a probing historical analysis of how sovereign debt continuity—the rule that nations should repay loans even after a major regime change, or expect reputational consequences—became the consensus approach. Odette Lienau contends that the practice is not essential for functioning international capital markets, and demonstrates how it relies on ideas of absolutist government that have come under fire over the last century. Challenging previous accounts, Lienau incorporates a wealth of original research to argue that Soviet Russia’s repudiation of Tsarist debt and Great Britain’s 1923 arbitration with Costa Rica hint at the feasibility of selective debt cancellation. She traces the notion of debt continuity from the post-World War I era to the present, emphasizing the role of government officials, the World Bank, and private-market actors in shaping our existing framework.

Lienau calls on scholars and policymakers to recognize political choice and historical precedent in sovereign debt and reputation, in order to move beyond an impasse when a government is overthrown.

 

Political ScienceAmerican Power after the Financial Crisis Book Cover

American Power after the Financial Crisis
Jonathan Kirshner

The global financial crisis of 2007–2008 was both an economic catastrophe and a watershed event in world politics. In American Power after the Financial Crisis, Jonathan Kirshner explains how the crisis altered the international balance of power, affecting the patterns and pulse of world politics. The crisis, Kirshner argues, brought about an end to what he identifies as the "second postwar American order" because it undermined the legitimacy of the economic ideas that underpinned that order—especially those that encouraged and even insisted upon uninhibited financial deregulation. The crisis also accelerated two existing trends: the relative erosion of the power and political influence of the United States and the increased political influence of other states, most notably, but not exclusively, China.

Looking ahead, Kirshner anticipates a “New Heterogeneity” in thinking about how best to manage domestic and international money and finance. These divergences—such as varying assessments of and reactions to newly visible vulnerabilities in the American economy and changing attitudes about the long-term appeal of the dollar—will offer a bold challenge to the United States and its essentially unchanged disposition toward financial policy and regulation. This New Heterogeneity will contribute to greater discord among nations about how best to manage the global economy. A provocative look at how the 2007–2008 economic collapse diminished U.S. dominance in world politics, American Power after the Financial Crisis suggests that the most significant and lasting impact of the crisis and the Great Recession will be the inability of the United States to enforce its political and economic priorities on an increasingly recalcitrant world.

Beyond Japan
Edited by Peter J. Katzenstein and Takashi Shiraishi

Have Japan's relative economic decline and China's rapid ascent altered the dynamics of Asian regionalism? Peter Katzenstein and Takashi Shiraishi, the editors of Network Power, one of the most comprehensive volumes on East Asian regionalism in the 1990s, present here an impressive new collection that brings the reader up to date.

This book argues that East Asia's regional dynamics are no longer the result of a simple extension of any one national model. While Japanese institutional structures and political practices remain critically important, the new East Asia now under construction is more than, and different from, the sum of its various national parts. At the outset of a new century, the interplay of Japanese factors with Chinese, American, and other national influences is producing a distinctively new East Asian region.Capitalism from Below Book Cover

Capitalism from Below
Victor Nee and Sonja Opper

More than 630 million Chinese have escaped poverty since the 1980s, reducing the fraction remaining from 82 to 10 percent of the population. This astonishing decline in poverty, the largest in history, coincided with the rapid growth of a private enterprise economy. Yet private enterprise in China emerged in spite of impediments set up by the Chinese government. How did private enterprise overcome these initial obstacles to become the engine of China’s economic miracle? Where did capitalism come from?

Studying over 700 manufacturing firms in the Yangzi region, Victor Nee and Sonja Opper argue that China’s private enterprise economy bubbled up from below. Through trial and error, entrepreneurs devised institutional innovations that enabled them to decouple from the established economic order to start up and grow small, private manufacturing firms. Barriers to entry motivated them to build their own networks of suppliers and distributors, and to develop competitive advantage in self-organized industrial clusters. Close-knit groups of like-minded people participated in the emergence of private enterprise by offering financing and establishing reliable business norms.

This rapidly growing private enterprise economy diffused throughout the coastal regions of China and, passing through a series of tipping points, eroded the market share of state-owned firms. Only after this fledgling economy emerged as a dynamic engine of economic growth, wealth creation, and manufacturing jobs did the political elite legitimize it as a way to jump-start China’s market society. Today, this private enterprise economy is one of the greatest success stories in the history of capitalism.