The Frederick S. Pardee Center for the Study of the Longer-Range Future hosted a Pardee Center Task Force meeting on Sept. 16 on “Managing Capital Flows for Long-run Development.” Held in the Kenmore Conference Room at Boston University, the Task Force meeting was convened by Pardee Center Faculty Fellow Kevin Gallagher in collaboration with José Antonio Ocampo and Stephany Griffith-Jones of the Initiative for Policy Dialogue (IPD) at Columbia University. (A full list of meeting participants is below.)
The Pardee Center Task Force was convened by the Pardee Center and the Initiative for Policy Dialogue specifically to address important questions concerning whether and how capital investments between developed and developing countries should be “regulated” or “managed.” While investment is essential for the development process, a growing proportion of foreign investment in developing countries is in the form of short-term “hot” money that has been shown to be extremely volatile and leaves developing country financial systems very vulnerable.
In the wake of the global financial crisis and in the absence of subsequent global cooperation it is becoming increasingly understood that national governments need to deploy regulations to manage the flow of speculative capital such that it does not disrupt their long-run development prospects.
Although international institutions such as the International Monetary Fund are beginning to recognize this need, there currently are no set guidelines to help national governments respond to speculative capital and to consider the extent to which there should be global cooperation to manage capital flows.
The explicit goal of the Pardee Center Task Force is to put the concerns of developing countries and the process of economic development at center stage. The central question the Task Force will address is: to what extent can capital account regulations be deployed by developing countries and coordinated at a global level so that they can enable financial stability for economic development?
Two publications stemming from the Task Force meeting will be published by the Pardee Center. The first will be a policy brief to be published later this fall and the second will be a full Pardee Center Task Force Report, including short papers by each of the Task Force members, to be published in 2012. The publications are key components of a larger initiative co-sponsored by The Pardee Center, IPD and the Global Development and Environment Institute (GDAE) at Tufts University to facilitate dialogue among policy makers and other experts on the topic of capital flows management.
In addition to the three co-chairs, the Task Force members include:
Amar Bhattacharya, G-24 Secretariat
Gerald Epstein, University of Massachusetts
Ilene Grabel, University of Denver
Rakesh Mohan, Yale University
Shari Spiegel, United Nations Department of Economic and Social Affairs
Arvind Subramanian, Peterson Institute for International Economics
Shinji Takagi, Osaka University
Ming Zhang, Chinese Academy of Social Sciences
Others who participated in the meeting include Paulo Nogueira Batista, Junior, the Executive Director representing Brazil and eight other countries in the region at the IMF (who also was the featured speaker at a Pardee Center Luncheon on Sept. 16); Mark Blyth from Brown University; Leonardo Burlamaqui, from the Ford Foundation, Dani Rodrik from Harvard University; Prof. William Grimes, chair of the BU International Relations Department; Joanna Miller of GDAE; Cynthia Barakatt of the Pardee Center; and Tania Tzelnic, a BU graduate student in International Relations who served as rapporteur for the meeting.
The Pardee Center Task Force is part of the Center’s larger Global Economic Governance Initiative research program led by Prof. Gallagher.