1st Edition

The Governance of Financialization in Latin America and East Asia Empowering Expertise

By Max Nagel Copyright 2024
    230 Pages 26 B/W Illustrations
    by Routledge

    The Governance of Financialization in Latin America and East Asia analyses how states in these areas have adopted different monetary, financial, and foreign exchange policies to govern financialization, which have induced varying levels of state control over financial markets.

    The book analyzes the puzzling observation of policy divergence by investigating how countries have reacted differently to major financial crises since the 1970s. It shows how Argentina and Japan selected a governance approach to financialization that followed Western prescriptions by propelling unregulated financialization; but also how Chile and South Korea, by contrast, crafted policies to reduce the negative effects of financialization on economic development and financial stability. The book identifies variegated expertise in central banks, ministries of finance, expert commissions, and research institutions that has informed policymaking across Argentina, Chile, Japan, and South Korea since the 1970s. It then demonstrates how governments have used experts to achieve diverse political objectives and explains how governments can use experts to enhance state agency to counter globalization pressures.

    This book will appeal to scholars of International Political Economy, comparative politics, economics, sociology, development studies, and Latin American and East Asian history. It will also be of interest to economists and policymakers who want to safeguard financial stability and promote economic growth.

    1. State Agency in Times of Globalization  2. Explaining Policy Divergence and Policy Change  3. Chile: Preserving Dictatorships and Democracies Through Financial Stability  4. Argentina: Ideologies and Failed Policy Experiments  5. South Korea: Overcoming Authoritarian Developmentalism, Safeguarding Financial Stability  6. Japan: Government Control Through Institutional Reforms  7. How Government–Expert Relations Produce State Agency and Propel Divergence


    Max Nagel is a Postdoctoral Researcher at the IAW Institute for Labour and Economy at the University of Bremen, Germany.

    “Have the governments of subordinated national capitalisms simply obeyed the structural forces powering global financialization? Using a well-calibrated set of nested comparisons, Nagel masterfully explains why Chile and South Korea regulated international financial flows while Argentina and Japan did not. At the core of this variation in divergence lies the political economy of domestic expertise on financialization, whereby state apparatuses find in financial expertise a source of agency for dodging convergence pressures and charting alternative policy pathways that have been obscured by the literature. In turn, this empowering expertise interacted with contextual factors to shape the final outcomes of financialization governance. By unpacking the mechanisms that shaped divergence in the articulation of this agency in the realm of financial governance, this superb book gives us a well-deserved break from decades of political economy scholarship theorizing the mechanisms of convergence under globalized financialization. Nagel’s book is an extraordinary achievement that revalues high-quality qualitative work and takes forward the august cross-regional comparative tradition comparing Latin America and East Asia that gave us the classics of development scholarship penned by Peter Evans or Atul Kohli.”

    Cornel Ban, Copenhagen Business School, Denmark

    “Few issues have attracted as much scholarly and public attention as the autonomy of states under conditions of financial globalisation. Yet Nagel sheds new light on the thorny relationship between states and markets by pointing to the role of expertise and its strategic use by domestic governments. This book will certainly be of interest to all those who care about the changing role of state capacity and, importantly, outside the Western world.”

    Manuela Moschella, Scuola Normale Superiore, Italy

    “How to explain the continued divergence of national financial policies in the face of waves of financialization? Pointing to the agency of experts and the power of ideas as crucial differentiating variables, this book offers a succinct and fascinating account of the different fates of Argentina, Chile, Japan, and South Korea following the initial liberalization of the 1970s. Well researched and carefully argued, this book is a major contribution by an up-and-coming scholar.”

    Matthias Thiemann, Sciences Po, France

    “This thought-provoking book sheds novel light on how countries frame financialisation. It highlights a key factor — expertise — that enables governments to exert domestic agency in resisting convergence in the global economy. This work is theoretically sophisticated and empirically rich – it is a required reading for anyone interested in the governance of finance and, more broadly, comparative and international political economy.”

    Lucia Quaglia, University of Bologna, Italy