If it got the election wrong, what good is the commission? Oh, it would then be a corrupt institution giving self-determination of the people a well deserved thumb in the eye—which is never not a good thing for Globalistas.

I’m saying that if you (a poor third-world country) want to be both neoliberal and successful then you should also be authoritarian. What happens to authoritarian + protectionist is irrelevant to this hypothesis.

How do you come to that conclusion? As I understand it, many of the East Asian economic success stories were authoritarian and protectionist.

The word “troll” was used ironically. I was objecting to the dismissal of Stiglitz, which I’ve seen elsewhere and seems to represent another instance of economics’ unwillingness to learn anything from outside economics.

I’m only saying that for a third-world country to become a neoliberal success story, it’s the best if it’s authoritarian and right wing.

Do you mean Ireland in the 90s? It could’ve had something to do with EU subsidies, no?

buermann – “But they’re great for recovering from open ones?”. Obviously the point is that Argentina would be growing regardless of whether it had open capital markets – there’s a lot of slack in the economy.
However, in the midst of a crisis capital controls can buy you time, which can be of the essence. They also might hurt you later on so it’s a cost benefit calculation. Malaysia seems to be doing alright though. The thing is once the worst is over (as in Argentina) it probably doesn’t matter much as most foreign capital has already fled and no new capital wants to come in. What causes the problems in the first place is when you have open capital markets, fixed exchange rates and you try to monkey around with your interest rates at the same time. Sooner or later (sooner) you’ll get in trouble (Argentina). Even if you don’t mess with your interest rates, fixed ER + free capital can get you into trouble just because investors might get suspicious that you’re doing some monetary monkeying around (Korea and Taiwan). This is way simplified but it’s pretty much how it works. So if you want capital flows you gotta dollarize, yeninize, dukatize or float, or otherwise lock up that printing press.

Note also the usual ambiguity as to what capital flows are. Abb1 is mostly talkin’ foreign direct investment, buermann portfolio investment. There might be good reasons to sometimes restrict the latter. The problem with the former, from point of view of poor countries, is that there’s not enough of it, not that there’s too much.

Whatever I was snarking at it wasn’t “becoming a poor, low growth economy” but “remaining”.

But ok, looks to me like they’ve recovered just fine, the poverty rate is back down to or below pre-crisis levels which is still disturbingly high, unemployment is the lowest in over a decade, yadda.

“closed capital markets = ON AVERAGE low growth”

But they’re great for recovering from open ones?

:P

Labor laws, environmental laws, unions and “other democratic institutions” (? – those have nothing necessarily to do with democracy) while they may be “good institutions” for other reasons (one can argue…) generally don’t do much for economic growth (and honestly, I don’t think they by themselves do much to hinder it – only when they’re tied up with corruption, for example when the only union in a country is basically an arm of the government)

Also it’s not the case – believe it or not – that opening up to foreign capital necessarily leads to an erosion of the institutions you mention. I think there’s a lot of ad hoc-ing fallac-ing going on here. It may be the case that foreign capital locates itself where there are few labor and environmental regulations. But usually these places had few labor and environmental regulations before foreign capital put its first dirty toe on them.

Argentina, annual growth since 2003: 8.8% 9.0% 9.2% 7.3% 4.0%

Well above the regional average every year since they became a recent example, conclusion: they’re doomed, doomed I tell you.

We can argue about the ways good institutions have been created historically or how they can be developed, but that’s beside the point.

I’m only saying that if the institutions have already been developed somehow, then ‘opening up’ is likely do damage or destroy them, that’s just the way international capital works. It doesn’t like local labor regulations, environmental laws, unions, other democratic institutions. With all things equal, international capital will always prefer strong, stable pro-capital authoritarian system, a-la Singapore or something. Or maybe this is what they mean by ‘good institutions’, I don’t know.

So, Tim, are you saying that capital account liberalisation is wasteful and expensive, involves obscene amounts of money being paid to a bunch of unproductive idiots, is defended by the most egregious, incomprehensible bullshit and inevitably results in lost jobs? I always had you down as a kind of neoliberal…

Huh? Where are all these places that had a free press and democratic institutions until they opened themselves up to international capital flows, or privatised their state-owned oil companies? Or for that matter, great labour and environmental protections? As far as I know, the process generally works in reverse: when countries get rich, they get more freedom, more environmental protections, better working conditions, and so forth. What examples are you thinking of?