July 2003
Neoliberal Norms and Capital Account Liberalization in Emerging Markets: The Role of
Domestic-level Knowledge-based Experts
Jeffrey M. Chwieroth
Jean Monnet Fellow
The Robert Schuman Centre for Advanced Studies
European University Institute
Via dei Roccettini 9
I – 50016 San Domenico di Fiesole (Fl)
Italy
Email: ## email not listed ##
Abstract
Why did a number of emerging markets liberalize controls over capital movements in the
late 1980s through the Asian financial crisis? While previous accounts of capital account
liberalization highlight a number of key factors, they do so at the neglect of social factors such as
norms and ideas. Relying on insights from constructivism, this paper proposes a new theory
arguing that capital account policy decisions in emerging markets are shaped in part by the
coherence and content of the norms and ideas that key decision-makers share. Emphasis is
placed on the ability of a “critical mass” of neoliberal knowledge-based experts to acquire power
in domestic-level decision-making positions and promote norms and ideas proscribing capital
controls. It is empirically shown using quantitative analysis of data on a sample of 37 emerging
markets from 1970 – 1995 that these domestic-level knowledge-based experts significantly
influenced the decision to liberalize in emerging markets.
Prepared for delivery at the 2003 Annual Meeting of the American Political Science Association,
Philadelphia, PA, 28 – 31 August.
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