A Theoretical Critique of the Channels of Influence between Financial Liberalization and Poverty

The relationship between financial liberalization and poverty has been the subject of significant work and scrutiny in the field of development economics, however much of this criticism has been based upon empirical foundations and has rarely been extended to reconcile with the theory of financial liberalization. This paper seeks to explore and delineate the theoretical constructs that are posited in support of the argument for financial liberalization, breaking down the causal pathways between financial liberalization and poverty into direct and transitive ones and examining the assumptions inherent in their usage. This paper then assumes a socio-political perspective on the financial liberalization process and posits on the existence of a bi-direction slippery slope operating between the financial liberalization lobby and the state. At the highest level of abstraction and simplification possible, the paper serves as a foundational criticism of the neoclassical framework erected in support of financial liberalization