Whence Policy? Government Policies, Finance, and Economic Integration

Economic integration may directly increase the need for private funding of consumption and investment, and should make it difficult for national governments to repress financial markets and to enforce redistribution policies that substitute private contractual arrangements. We analyze the trajectories since the 1980s of financial market development and policy choices and interpret them structurally as reactions, shaped by country-specific characteristics, to exogenous globalization pressures.