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Journal of International Relations and Development
Volume 2, No. 4 (December 1999)
A New 'Bretton Woods' for Development?
By Helge Hveen
*
Introduction
FINANCIAL AND BANKING CRISES HAVE BECOME A MAJOR FACTOR IN THE INTERNATIONAL POLITICAL ECONOMY. Between 1975 and 1996 there were almost 90 currency crises and a somewhat smaller number of banking crises (Caprio and Klingebiel 1996). They have caused systemic instability, increased economic insecurity for nation-states and high vulnerability for individuals and firms. They undermine sustainable development and contribute directly or indirectly to widening rich-poor gaps between as well as within many if not most countries - developed as well as developing (UNDP 1999). For almost two decades we have seen crippling foreign debt burdens grow and economies go to pieces. Both donors and borrowers have followed a fuit en avant strategy: substantive and objective problems are being pushed ahead and remain unresolved.
The East Asian crisis of 1997 represents a chance for breaking from this pattern. The importance of the region as a trading partner and investment location for regional and overseas interests has made the Asian crisis a truly INTERNATIONAL crisis. Its contagion effect has convinced decision-makers in the core of the financial system that fuit en avant is no longer possible. Similar contagion effects were visible in previous crises, notably some in Latin America, the stock exchange crash on 'Bloody Monday' in 1987 and, in particular, the peso crisis in Mexico 1994-95 with a tequila effect in the hemisphere. But the 1997 East Asian crisis appears to be the first to be commonly defined and understood as truly contagious. Proof of that is the change of perceptions and attitudes as reflected in the discourse of the international financial elite.
After having talked about the East Asian crisis as a regional phenomenon caused by local political and industrial failures for about a year or so, in the late summer of 1998 Federal Reserve chairman Alan Greenspan began to focus not only on volatility and contagion in general terms, but on the concrete problem represented by certain types of finance agency at home. The powerful Fed chairman referred to the problem of highly leveraged investors, including hedge funds, and opened up other policy proposals, including regulation of such agents that had been rejected a few months earlier. Greenspan and many other financial experts appear to be convinced that crises are caused by market failure as well as by public policy failure. The annual meetings of the International Monetary Fund (IMF) and the World Bank confirmed that the time of the monetarist paradigm was over, but also that there was no alternative to put in its place. Political leaders and institutional administrators who had talked vaguely about the need for 'a new international financial architecture' started to design it.
The deregulation and liberalisation discourse remains, with continuing strongholds in Wall Street and the City, in the Treasury and on Capitol Hill. But system critics have got more attention and clout and are supported by key persons like the chief economist of the World Bank, Joseph Stiglitz (1999). For the first time since their advance to the forefront of economic policy-making, the neoclassical liberalists face broad and effective opposition in high places. There is now broad support for reform of policy and institutions. There is also a call for a more equitable burden sharing between lenders and borrowers, illustrated inter alia by the long overdue announcement by the G7/G8 in June 1999 that almost all the outstanding debt of the so-called Highly Indebted Poor Countries will be written off. Rather than pressing for new 'big bangs' in liberalising capital markets as they did in the early 1990s, the finance ministers and central bank directors of the G7 will now allow temporary capital account controls to be imposed in developing countries.
The purpose of this article is to first look at the discourse and the process that lies behind it and to attempt to account for changes in policy thinking. The second and more important purpose is to evaluate the proposals that have been put forth as regards reforming the international financial system. These proposals will in the present context be evaluated with specific regard to their stabilising and distributive aspects and with respect to how they meet the efficiency as well as legitimacy requirements of global governance. It is only when reforms meet these aspects and requirements adequately that they will contribute to sustainable development. A financial system not producing an improved real economy for all its members is not a viable project in the long run. On the other hand, IF a financial system that does not meet these criteria adequately is NOT established, sustainable development will at best run the permanent risk of being undermined or at worst become impossible.
Lessons of The East Asian Crisis
ALTHOUGH THERE IS A RICH SUPPLY OF ACCOUNTS OF THE EAST ASIAN CRISIS OF 1997, IT IS NECESSARY TO BRIEFLY RECAPITULATE IT FOR OUR PURPOSES. Most accounts that followed immediately after the outbreak of the East Asian crisis of 1997 pointed to local public policy failure or local market failure as the main - some accounts maintained the ONLY - cause. 1 Weak financial institutions, lack of transparency and of effective public regulatory power, overvalued currencies and/or fixed exchange rates, large current account deficits, crony capitalism and corruption were pointed out as the main factors. There was and is certainly considerable evidence that such factors did apply (Moon 1999). But fairly soon after the crisis erupted, it also became evident that the remedying measures taken on the initiative of the IMF and rather significantly based on the Latin American experience were counterproductive. In some cases such as South Korea, these measures only worsened the crisis (Chang 1998). The IMF thus soon changed its policy from one of demand contraction to rescheduling of debt and liquidity creation. Part of the reason for that change must have been that the critics had delivered a convincing argument. It also became evident to practically all analysts that the short-term debt position of the crisis countries was the real core of the problem.
Structure and agency are very strongly linked in this arena. In addition, rationalist perspectives on agency must be supplemented by and perhaps even given place of prominence over cognitive and social constructivist perspectives. Short-term liabilities combined with a lack of reserves make countries vulnerable to sudden changes in the PERCEPTIONS of market actors. In this respect, it matters little whether debt is held by public or private institutions. In Mexico in 1994-95, Russia in 1998 and Brazil in early 1999, the debt was the government's, whereas in Indonesia, Thailand and South Korea in 1997 it was primarily owed by private firms and banks. They were, however, equally subject to the way market actors perceived risk and their reactions to it.
It also apparently matters less whether lenders are hedge funds or banks. The main lenders, the Western banks, have tended to behave less according to the logic of the bank-based system typical of Northern European finance and behave more according to the Anglo-Saxon market-based system. Stability has been traded for competition. The underlying logic is the idea of the self-regulating market. Banks thus actively took part in pushing money out to private borrowers in East Asia until the third quarter of 1997 when they suddenly pulled out en masse (Wolf 1998).
Minsky's (1986) neo-Keynesian FINANCIAL INSTABILITY HYPOTHESIS is supported by previous banking crises such as those in 'ultra-stable' Scandinavia in the late 1980s and early 1990s. It tells the well-known story of how individual rationality creates collective irrationality. According to Minsky, financial crises are a logical result of the way banks compete, in other words, a result of their behaving rationally. In stable times, they compete for market shares, sometimes almost 'throwing' money after borrowers in order to achieve their goal. But at some point they change strategy and start pulling back funding in order to increase liquidity. This change of preference and hence strategy leads to increased risk for the whole financial system. Some projects are made insolvent and others, even the most economically sound projects, are pushed into liquidity problems which starts a downward spiral in the real economy. Industrial firms go bankrupt in order for banks to be saved.
The type of structure-agency interaction that was most visible in the East Asian case was probably that of collusion between holders of short-term, poorly guaranteed debt (local industrial corporations or banks) and foreign lenders with low risk and short-term profit motives. As two World Bank economists put it: "The ability of this variable, by itself, to predict the crises of 1997, is remarkable" (Furman and Stiglitz 1998:PAGE?).
The worst case, and hence an example to avoid following by all means, appears to be an (unholy) alliance between risk-taking borrowers and lenders who both act with minimum transparency, lack solid information or disregard it and/or are motivated by 'moral hazard'. The latter represents a situation where agents act on expectations that they may involve high risk because somebody will bail them out in the end - or the partner to a transaction may be forced to carry the costs. If such an alliance has a substantial influence on capital flows in and out of a country or a number of countries, it is likely to generate crisis. It becomes self-fulfilling (Wyplosz 1999).
Before we turn to how these problems may be addressed, we need to know what caused the alliance to appear so prominently in the first place. Again, the discourse appears to have changed in focus and content. There may still be fairly widespread consensus that cronyism and lack of transparency are the major causes. But there is now agreement that they do not apply equally in all cases. In the case of Thailand, the economic fundamentals, notably a nine-percent current account deficit, were visibly wrong well before the summer of 1997. But the forecasters in the system - the rating agencies and the IMF - did not change their good forecasts or act quickly and ex ante on signals of a poor outlook (respectively). Thus, the credit rating agencies contributed to volatility in the recent crises (e.g. the IMF issued a report on Thailand in early summer 1997 which stated that the economic outlook was good). In South Korea, the fundamentals were good practically right up to the eruption of the crisis, but here political leadership and the right mix of reforms were missing (Moon 1999). Active deregulation of public control over financial agents during the first part of the 1990s may also have been a main cause. The problem was not cronyism or moral hazard in this case; few firms were bailed out by the state prior to the crisis. It was rather that the state had been hit by deregulation anorexia and become too slim and weak in the finance arena.
Two other East Asian countries, which for space considerations cannot be discussed here, Indonesia and Malaysia, also provide a lesson in financial expertise, albeit for different reasons. The important point is that the extent to which the expertise has developed and core institutions are looking for new policy options is remarkable. Stiglitz points out that the lessons of the East Asian crisis, and that of Russia, are completely at odds with the neoclassical economics paradigm and its view of globalisation (Stiglitz 1999). The lessons include: that the causes of national financial crises are often found in linking domestic and international factors and actors; that a crisis that starts in one country or region is likely to be contagious; that the financial system left entirely to its own tends to produce market failures with serious political and social consequences; and that public regulation of capital flows is not only necessary but could indeed work.
Governance: Self-Regulation and/or Regulation?
AS THE BRIEF EXPOSÉ OF CRISIS DYNAMICS HAS SHOWN, THE VOLATILITY AND VOLUME OF TRANSNATIONAL CAPITAL FLOWS AND THE LIBERALISATION OF FINANCIAL MARKETS ALL TEND TO REDUCE GOVERNANCE OPTIONS TO TWO BROAD CLASSES: EITHER SELF-REGULATION AMONG THE ECONOMIC ACTORS, OR MODERATE REGULATION BY PUBLIC AUTHORITIES. The former would not have much 'Bretton Woods' (as it was originally designed to be) in it, whereas the latter might.
Self-regulatory arrangements are clearly a realistic option, but for reasons and in forms partly different to those normally heard. The wisdom here is that the power of the state has receded. The idea that self-regulating markets will suffice and that global market actors want as weak a state as possible is, however, challenged and, it seems, increasingly so with the recent crisis experience. In particular, corporate managers in knowledge-based manufacturing and non-financial services have a natural incentive to want public regulating bodies to play a role. The recent financial crises have probably increased the incentive of these corporate actors to seek state assistance for stabilisation purposes. Some global corporations are already indicating that they see their own interests best served by re-establishing financial stability including less currency rate volatility, a more active state and indeed gradual redistribution of incomes. The point is that the globalisation process in finance has not made the state obsolete. Public authorities may still exercise sovereign power over financial flows.
In the following, the author shall concentrate on the issue of institutional reform and design, but in a way that is hopefully relevant to the issue of choice of more overall development policy. Rationalist perspectives on international order see actors as motivated by an expectation that their choice of action is based on choosing the optimal alternative from among several. According to March and Olsen (1998), this is to follow 'the logic of expected consequences'. Much of the liberal economics or neoclassical economic policy package is derived from this perspective and its assumptions about a direct link between correct policy and achieved result. The other main perspective they identify is the 'logic of appropriateness' which is one that sees actions as rule-based, as following from a common identity, or as shaped by institutions.
The FINANCIAL INSTABILITY HYPOTHESIS fits in with the dilemma of the rationalist perspective pointed to above: individual rationality creates collective irrationality. Can institutions solve the problem? Again recent experience with financial crises indicate that they can, BUT ONLY IF they are so designed that they are both sufficiently powerful and flexible across national-societal and inter-temporal variations in modifying the behaviour of market actors. An additional requirement may be that institutions are open to learning and allow negotiating processes to influence outcomes. If rules become too rigidly applied with no or little room for adjustment, it may certainly create negative consequences.
Solutions to the issue of governance in the financial system should therefore, as a first criterion, be a combination of a RULE-BASED order based on principles of balanced and equitable consequences for members on the one hand, and considerable scope for variance in policy definitions and adjustment of policy according to LEARNING from experience on the other. Solutions to the contemporary governance problems have to be designed so as to combine global norms, rules and threats of sanctioning with PROCESSES - deliberation and learning, consultation and negotiation - that may transform principle to practice through reasonable adjustment to local conditions and historical trajectories of development.
The first broad policy option to be considered is SELF-REGULATION by the economic actors. As some actors, including autonomous central banks, realise that they are hurt by other actors not following minimum standards of prudence, such as in the case of ponzi loans, they should be able to discipline those actors by for example denying them access to credit. However, as we saw in the case of the East Asian and earlier crises, both foreign and local banks were themselves part of the problem. One necessary way of achieving greater discipline under a self-regulating order would therefore be to enforce strict bankruptcy rules and to limit access to a 'lender of last resort' that would bail the offender out. The key element in a functioning self-regulatory system is thus an INCENTIVE STRUCTURE that functions as a deterrent to destabilising agents.
Changing the 'Basle rules' which give incentives to borrowers to choose short-term credit because of lower interest rates is one necessary measure if the incentive structure is to become the right one. Better accountancy by following internationally agreed standards would be another necessary measure in a self-regulating system. Yet here one approaches, or may already have crossed, the line between a self-regulating and a publicly-regulated system. There is now consensus that greater transparency in financial flows should be achieved by having both borrowing and lending parties produce information about their actions. The G8 heads of state meeting in Cologne in June 1999 produced a list of actions to be taken. It may function as a self-regulating system if the list is interpreted as a new incentive structure and everybody behaves according to its intentions ('logic of anticipated consequences'). But the assumption made in Cologne is that national and public regulating bodies will do the monitoring and if necessary impose sanctions. It is premised on another assumption: that self-regulation may function as long as everybody behaves but the incentive structure, even if it is the right one, may not be sufficient.
Four Ideal-Type Positions on Policy
IN WHAT FOLLOWS, THE AUTHOR IDENTIFIES FOUR TYPES OF POSITIONS ON CHOICE OF POLICY AND INSTITUTIONAL DESIGN, ALL MEANT AS IDEAL TYPES. Self-regulation is the preferred policy for what may be called the 'LIBERALIST' and 'CONSERVATIVE' schools, the first two types of position we identify. The former represents the protagonists of the self-regulating market and the 'lean' state; they are most prominently represented on Wall Street and in the Republican party. They criticise the IMF and the World Bank for being excessive regulators and want a leaner, less powerful and financially weaker IMF - if any at all. For them, financial crises are simply market corrections. On the contrary, the 'conservatives' prefer an order where financial actors provide for discipline among themselves, the world accepts occasional crises as part of a normally functioning market, AND in which the IMF and the Bank of International Settlements (BIS) provide the backing and supervision of the system that is needed WHEN it is needed. This option logically has the support of much of the leadership of the IMF, but also the present United States administration and several governments in Europe. 2 The US government does not and, because of a hostile Congress, cannot support the proposal of Japan that the institution be given new facilities and the instruction to borrow money in order to become a global 'lender of last resort' (cf. Fischer 1998; Soros 1998).
Both in the IMF and to a greater extent in the World Bank the 'conservative' position is alternating with one that presupposes substantive reforms based on stronger regulatory roles for public authorities. This third ideal-typical position may be referred to as the 'INSTITUTIONAL REFORMERS' or 'moderate regulators'. It differs from the liberalists and the conservatives in at least three areas. First, it argues much more principally and strongly for the need of institutions to perform the function of co-ordinating and supervising market actors. It sees the neoclassical case for homo economicus as being limited. Market actors will tend to resort to power in economic relations and will inevitably face co-ordination problems between them. Rules and procedures for negotiating solutions to such problems and an organised ability to ensure that they are being followed are absolutely necessary.
Secondly, this position differentiates between institutionally developed and less developed polities (countries). Developing and 'transition' countries practice less self-regulation in the financial system and demonstrate a greater public presence in it than do developed countries (Helleiner and Oyejide 1998; Wyplosz 1999). But they do so primarily because of institutional weakness, not strength. Their public institutions are mostly weak and ineffective in regulating the sector, and one important reason is that private sector institutions are also weak.
The third area in which 'institutional reformers' differ with the two previously mentioned is that of the LEGITIMACY or representativeness of proposals. Legitimacy represents the degree and ways by which policies and institutions are perceived to represent the interests and ideas of the subjects on whose behalf or in whose interest they are supposed to work. It may conflict with the dimension that many or most participants in the current discourse appear to have had in mind: the EFFICIENCY dimension of policies and institutions. But stressing legitimacy is consistent with the 'logic of appropriateness'.
For the 'liberalists', the self-regulating market is the only and, for the 'conservatives' the most efficient, institution. Assuming that participants accept the verdict of competition and that fair competition is in effect practised, the system according to them is also legitimate. The 'conservatives' would add an important caveat: a minimum of institutionalised public supervision is needed in order to guarantee that competition is indeed fair and free. The 'institutional reformers' transcend this position and introduce a social AND spatial aspect to the legitimacy dimension. While the 'liberalists' reject those aspects, 3 the 'conservatives' may accept them, but within a limited perspective. The conservative position sees public regulatory institutions as legitimate as long as they are efficient in performing their function of guaranteeing competition and stability at one and the same time. Thus, a financial system run by a hegemonic state or a small number of states such as the G7 would be perfectly legitimate for the conservatives. The 'institutional reformers' tend to see such 'vertical legitimising' as unacceptable and insist on the right of participation for all parties affected by policy decisions. They would, in other words, ask for 'horizontal legitimacy'.
The 'institutional reformers' include a number of institutional economists, 4 several other economists and international political economists, 5 some centre-left politicians in Europe and some international administrators. Several of them would say that the IMF is a problem because of US dominance in its decision-making and its policy failures during recent crises. These are some reasons why it has been suggested to base the new 'international financial architecture' on BIS instead of the IMF in developing a World Financial Authority (Eatwell and Taylor 1998). Other 'institutional reformers' point to the former Ad hoc (Helleiner and Oyejide 1998) or the Interim Committee within the IMF as institutions providing acceptable horizontal legitimacy, while G7 and the US-sponsored G22 within the IMF do not.
This boils down to the classical issue in international political economy: whether a systems works best over a long time period under hegemonic authority or under democratic representative governance. The last two decades of Anglo-Saxon neoliberal economic ideas of governance being practised by markets may have discredited the hegemony alternative in the eyes of many national polities around the world and made the representation alternative a necessity. That alternative is consistent with the 'logic of appropriateness'.
The fourth type of position remains to be mentioned: that of the 'NATIONALIST DEVELOPMENTALISTS'. It would opt for national controls as a main regulatory strategy on finance. Representatives of this position differ from 'institutional reformers', who also include national controls on their agenda, by insisting that a change of basic IDEAS on policy and development is a prerequisite for a viable international system to produce development in poor, less developed or emerging economies. For some of the more radical adherents to this position, financial volatility is not the main problem, but over-reliance on foreign capital and markets and too little emphasis on domestic resources are. They emphasise savings at home, reliance on the domestic market as the principal locomotive of growth, and more equitable distribution through e.g. progressive and higher taxation as a necessary condition for growth (Sunkel and Mortimore 1995; Bello 1999).
National autarky of the types promoted in the 1970s have few contemporary proponents. The idea of self-reliant development appears to be promoted relatively more for application at the level of transnational networking and growth triangles and within the framework of international regions (Bach 1999; Hettne, Inotai and Sunkel 1999). The idea of transnational and regional governance appears to be on the advance, even in the financial system. Certainly, there is principled opposition to the idea from representatives of all of the three other positions identified, some of which interpret the idea as a strategy for 'bloc formation'. However, there is a widespread belief within the European Union in the idea that its institutions should have a prominent role to play in the new international financial architecture. The idea of an Asian Regional Fund, promoted by Mahatir and supported by Japanese leaders, was strongly opposed by the United States, probably for reasons of power more than as a matter of principle. 6 Despite - or perhaps even because of such resistance - regionalism will grow as a force partly for reasons associated with identity and legitimacy. It will thus claim a role in the governance of the international financial system (Hveem 1999).
Conclusion: The Wider Scope of Action
THE IMPLICATIONS TO BE DRAWN FROM THIS ANALYSIS ARE SEVERAL, BUT ONLY A FEW WILL BE MENTIONED HERE. First, there should be no more 'big bangs', but rather gradualism and sequencing of policy when integrating developing and transition countries into international financial markets. The rule should be to put the institutions in place first, then gradually introduce regulated market conditions. As a consequence and secondly, IMF and World Trade Organization (WTO) statutes and policies should be changed from being aimed at global and across-the-board liberalisation of markets (universal implementation of MFN - most-favoured nation - and national treatment) to becoming geared towards continued gradualism, partial regulation and sequencing of liberalisation strategies. The present institutional framework is complex and quite segmented. A large number of differing institutional solutions make reforming both technically and politically difficult. The third implication, therefore, is that some more cohesion and co-ordination is an absolutely necessary condition for the future architecture to be functional and the system to be viable.
If these three preconditions are met, the system will move towards a 'New Bretton Woods' which contains some of the original ideas of the institution: control against economic volatility and protection of basic social and political stability. This does not mean that liberalisation is neither needed nor wanted; it often is. It means applying the type, degree and speed of liberalisation that is appropriate for a given country. It means reinstating the principle of differential or preferential treatment for developing and 'transition' countries. It also means taking measures at global and regional levels to support them in their action. One such measure could be the Tobin tax contested by many but met with support from other decision-makers. Another would be to take concrete measures urged by the French government against the least transparent of the 'free-riders' - investment and tax heavens in offshore markets and secret bank accounts in core economies. If or when these are made transparent and brought under international agreements, it will also become apparent how much capital controlled by actors in developing and transition countries has fled these economies and could potentially be repatriated.
The system as it functioned during the last two decades has produced results which have increasingly come to reflect what Minsky (1986) predicted but the neoclassical theory did not. Several representatives of the latter have adopted a new position advocating reforms in order to reduce the instability and volatility of the system and to cope with its negative distributive effects. They represent Western governments and research institutions, and they represent the International Financial Institutions (IFIs). Representatives of developing and transition countries have not been very vocal on these issues. The 'logic of appropriateness' implies that they should. They have more than enough openings in recent declarations by IFIs leaders and some Western statesmen to follow up. During 1999, the latter have linked the need for and ways of financial reform to the (ill-fated) 'logic of expected results' by arguing for a new system that addresses the negative effect of globalisation and liberalisation on the poor.
The World Bank's introduction of the notion of a 'comprehensive development framework' goes further to invite reform of international finance to be inserted into a broad strategy for sustainable growth and development. But what are the substantive contents of such a strategy? And how far should the strategy go? Even if debt relief is finally implemented, and volatility in currency rates and some of the other destabilising factors are better controlled, how may continued capital flows from North to South contribute to development?
Even if further opening of Northern markets to Southern products comes through the WTO that does not guarantee an end to the widening income gap. Developing countries have resources and they are told to build higher levels of human capital through building knowledge (UNDP 1999). But how may strategies still in the core of policy formation, such as reliance on export-orientation and comparative advantage, offer the solution to the most pressing problem - that of making better use of human and natural resources in order to increase productivity and production in an ecologically sustainable way? The burden of proof lies with those who disregard the facts: a number of countries which are worst off financially are also most specialised in products for which demand and thus accumulation potential has been falling over the last few years (UNCTAD 1998).
A comprehensive approach that links policy on the financial system to broader development strategies is needed. However it must critically look at some of the assumptions that still guide these strategies. Contrary to widespread assumption, investment and trade policies are not neutral. Public policy has done and can still do a lot of damage if it intervenes too broadly and for too long on investment decisions. Latin American import substitution policies, and even partly those of South Korea, made protection permanent where it should have been sequenced and gradually terminated. But the opposite also applies: allocations of investments and resources cannot be left entirely to the market. There has to be some sort of industrial policy, or visible hand, that intervenes selectively in the operations of markets. Do we have to remind ourselves that the lessons taught by the history of OECD (Organisation for Economic Co-operation and Development) countries is closer in reality to Hamilton and List than to the neoclassical doctrine of complete non-intervention? The economy that mixes industrial policy with the market under legitimate representative governance still remains the long-run optimal choice.
October 1999
Endnotes
*: Helge Hveen is Professor at the Department of Political Science and Centre for Development and the Environment, University of Oslo, Norway. Back.
Note 1: A notable exception was Stanley Fischer, the chief economist of the IMF, who pointed rather early to the herd behaviour of financial actors as the primary cause of the East Asian crisis (Fischer 1998). Back.
Note 2: Within the research community one supporter is Eichengren (1999) who presents a number of concrete proposals to improve the existing institutional framework rather than redesigning or removing it. Back.
Note 3: Cf. Lindbeck (1999) who argues, on the basis of experience from Europe and North America, that what he assumes is also relevant for developing countries, namely that labour markets should function as a market, freed of government intervention and centralised labour organisations. Back.
Note 4: Stiglitz (1999) would be among the former, whereas Chang (1998) represents the more 'radical' wing. Back.
Note 5: Rodrik and Velasco (1999), and Eatwell and Taylor (1998) would be among the former, Strange (1998) among the latter.Back.
Note 6: This view was expressed by Krugman as well as on CNBC Dow Jones Newswires on 28 August 1998.Back.
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