One of the most important developments in the world economy during the
past three decades has been the willingness of governments in emerging
markets to liberalize controls over international capital
movements—a process known as capital account liberalization. What
accounts for this trend? While existing research highlights a number of
important factors, it neglects the role played by the rise and spread of
neoliberal ideas that prioritized liberalization as a policy choice.
Extending the literature on epistemic communities, I argue one critical
mechanism shaping policy decisions is the formation of a coherent team of
neoliberal economists. Using a new data set that codes the professional
training of more than 1500 policymakers in emerging markets, I assess the
relative importance of this argument quantitatively on a sample of
twenty-nine emerging markets from 1977 to 1999. In order to assess the
independent effect of neoliberal economists, I also take into account the
endogeneity of the appointment process, assessing whether appointments are
driven by credibility concerns, political interests, or economic
conditions. I also stress that a fuller understanding of the appointment
process necessitates a focus on the social environment in which
appointments are situated.Earlier versions
of this article were presented at the Program on International Politics,
Economics and Security (PIPES), University of Chicago, 28 April 2005; the
99th Annual Meeting of the American Political Science Association,
Philadelphia, 28–31 August 2003; and the Meeting of the Working
Group on Political Economy, European University Institute (EUI), San
Domenico di Fiesole, Italy, 29 October 2003. The author is grateful for
helpful comments on earlier drafts provided by David Andrews, Benjamin J.
Cohen, Scott Cooper, Garrett Glasgow, Lloyd Gruber, Emilie Hafner-Burton,
Bob Hancke, Joseph Jupille, Ralf Leiteritz, Charles Lipson, Layna Mosley,
Lou Pauly, Andy Sobel, Duncan Snidal, Lora Viola, and participants in the
PIPES workshop. The author would also like to thank Lisa Martin and the
anonymous reviewers for their many suggestions and insightful comments on
previous versions of this manuscript. Research support provided by the
Department of Political Science at Syracuse University and a Jean Monnet
Fellowship from the Robert Schuman Centre for Advanced Studies at the EUI
is also gratefully acknowledged.