New Pardee Center Paper on Financial Reforms and the Trading System

The Frederick S. Pardee Center for the Study of the Longer-Range Future has released a new paper in its Issues in Brief series titled, “Global Financial Reform and Trade Rules: The Need for Reconciliation.” The paper is co-authored by Pardee Faculty Fellow Prof. Kevin Gallagher with Leonardo E. Stanley.

In the brief the authors discuss the recent support by economists and policymakers to use financial regulations to control the cross-border flow of capital. However, the authors argue capital account regulations (known as CARs) often are limited or prohibited by commonly-used provisions in trade and investment treaties. The policy brief describes the outcomes of a “compatibility review” between the ability to implement capital account regulations and standard provisions of the global trading system.

The review was conducted at a workshop of the Pardee Center Task Force on Regulating Capital Flows for Long-Run Development held in June 2012 at the Center for the Study of State and Society (CEDES) in Buenos Aires, Argentina. The workshop was co-sponsored by the Pardee Center, CEDES, and the Global Development and Environment Institute (GDAE) at Tufts University, with support from the Ford Foundation. A Pardee Task Force Report that provides an in-depth examination of the issues discussed in this policy brief is scheduled for publication in 2013. The Task Force and these publications are part of the Pardee Center’s Global Economic Governance Initiative, led by Prof. Gallagher.

An electronic version of the paper can be downloaded from the publications library on the Pardee web site. Hard copies are free and may be requested by sending an email to pardee@bu.edu