Authors' note: We gratefully acknowledge help with the data and argument from Lawrence Broz, Erik Engstrom, Miles Kahler, David Lake, Quan Li, Arend Lijphart, Angela O'Mahony, Dennis Quinn, and the editors and reviewers of ISQ. We presented an earlier version of this article at the Annual Meeting of the Midwest Political Science Association in April 2000, and thank in particular Quan Li for his comments then. The data introduced in this article are available from the authors or the web site 〈http://www.weber.ucsd.edu/~crector〉.
International Regimes, Domestic Veto-Players, and Capital Controls Policy Stability
Article first published online: 20 MAR 2003
International Studies Quarterly
Volume 47, Issue 1, pages 1–22, March 2003
How to Cite
Kastner, S. L. and Rector, C. (2003), International Regimes, Domestic Veto-Players, and Capital Controls Policy Stability. International Studies Quarterly, 47: 1–22. doi: 10.1111/1468-2478.4701001
- Issue published online: 20 MAR 2003
- Article first published online: 20 MAR 2003
States' decisions about regulating international capital movements are shaped in part by institutions and partisanship at the domestic level, but the effects of domestic-level variables are themselves contingent on the constraints imposed by the international system. We amend the veto-players hypothesis to account for the effects of international regimes on the political influence of domestic players in state decision-making. The history of changes in international financial regulations over the past four decades provides an ideal case to study the interaction of international regimes and domestic decision-making systems. We create a data set of all capital controls policy changes that 19 OECD parliamentary democracies made during the years 1951–1998. Using these new data, we find that states with a higher number of veto-player parties in government enact fewer capital controls policy changes. Furthermore, ideologically right-of-center governments in these industrialized countries are more likely than others to enact capital controls liberalizations. We also find, however, that the independent effects of these domestic-level variables disappear after the mid-1980s, when the systemic constraints imposed on individual states increased substantially.