Financialisation in developing countries: approaches, concepts, and metrics

Lapavitsas, Costas; Soydan, Aylin

doi:10.1080/02692171.2022.2052714

Cited by 16 publications

(13 citation statements)

References 90 publications

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“…In particular, several authors have pointed out its distinctive features in peripheral and semi-peripheral contexts (Bonizzi, 2013; Bonizzi et al, 2020; Karwowski and Stockhammer, 2017). This phenomenon has been referred to as ‘dependent’, ‘subordinate’ or ‘peripheral’ and in many studies, these terms have been used interchangeably (see Lapavitsas and Soydan, 2022). While it is considered that they can be used as synonyms, this paper will use ‘dependent financialization’, since it is believed that this is the term that best reflects the relationship between the peripheral and semi-peripheral economies with the core.…”

Section: Conceptualizing Dependent Financialization In the Baltic Statesmentioning

confidence: 99%

The (un)usual suspects? Exploring the links between illicit financial flows, Russian money laundering and dependent financialization in the Baltic states

Pataccini

2023

Competition & Change

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The paper analyses the links between illicit financial flows, money laundering and dependent financialization using the Baltic states as exploratory case studies. Since the restoration of their independence, Estonia, Latvia and Lithuania have been involved in several massive money laundering scandals, with illicit funds flowing mainly from Russia, as well as other former Soviet Republics. Currently, these episodes have taken on a new dimension in light of the Russian invasion of Ukraine. Until recently, the prevailing narrative was that illicit financial flows and money laundering in the Baltic states resulted from a failure in the financial system’s ability to monitor and detect these operations. However, this paper argues that far from being a simple shortcoming, money laundering and illicit financial flows in the Baltic states are products of dependent financialization in two main ways: first, in the decade leading up to the global financial crisis, the overall economic performance and the returns of financial actors in these countries became dependent on foreign capital inflows. This dependency was key to enabling the arrival of illicit financial flows and money laundering from the post-Soviet space, especially after the crisis. Second, due to its comparative advantages and its subordinate position in the international financial system, the banking sector of the Baltic states was used as an intermediary in global financial networks of money laundering for funds from the former USSR, where it assumed most of the financial, legal and reputational risks. Finally, the research also points to the emergence of new risks.

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Section: Conceptualizing Dependent Financialization In the Baltic Statesmentioning

confidence: 99%

The (un)usual suspects? Exploring the links between illicit financial flows, Russian money laundering and dependent financialization in the Baltic states

Pataccini

2023

Competition & Change

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“…These asymmetries of central bank power support the ways financial chains operate at an international level, facilitating transfers of value at a global scale. Indeed, as Fernandez and Aalbers (2020: 686, emphasis original) argue, 'net financial movements have been flowing uphill, from the periphery to the core' (see also Kaltenbrunner and Painceira, 2018;Lapavitsas, 2009;Sokol and Pataccini, 2020). Either way, it would appear that spatial dimensions of central banks' capital-generating operations could easily fit within the framework of 'uneven and combined state capitalism' put forward by , while also contributing to inherently geographical nature of financialised capitalism (e.g.…”

Section: Central Banking Financial Chains and Uneven And Combined Sta...mentioning

confidence: 99%

Financialisation, central banks and ‘new’ state capitalism: The case of the US Federal Reserve, the European Central Bank and the Bank of England

Sokol

2022

Environ Plan A

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Monetary policies are not usually considered as part of the repertoire of ‘state capitalism’. However, unconventional monetary operations performed by central banks in recent years make this exclusion increasingly problematic. This paper thus explores whether recent central bank interventions should be considered manifestations of ‘new’ state capitalism. Analysis focuses on the actions of three central banks from the advanced capitalist core in the West – the US Federal Reserve, the European Central Bank and the Bank of England. By mobilising the ‘financial chains’ perspective, this paper highlights the fact that, under financialisation, contemporary central banks have assumed a pivotal role in shaping Western capitalism and its uneven geographies. Through these recent unconventional interventions, central banks have in effect become ‘creators’ or ‘generators’ of (financial) capital. As such, their role in shaping uneven economic geographies across space (well beyond their official territorial boundaries) has expanded. Spatial ramifications of central banks’ capital-generating operations could thus fit easily within the framework of ‘uneven and combined state capitalism’. The possibility of considering the unconventional operations of central banks as state capitalist could also go hand in hand with a modified definition of state capitalism. Indeed, the rubric of state capitalism could potentially be enlarged to include configurations of capitalism where the state plays a particularly strong role not only as promoter, supervisor and owner of capital but also as a ‘generator’ of capital. This capital-generating role appears to be essential for the survival of contemporary capitalism.

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“…Regarding financialization, the concept itself is complex and closely related to those of 'financial liberalization and deregulation', and 'financial globalization', specifically in the periphery countries [9]. Financial liberalization, which spread slowly but inexorably and widely in the second half of the 20th century, involved the implementation of a set of neoliberal economic policies aimed at reducing (and eventually eliminating) the set of regulations and controls operating in domestic financial markets in the hope that, by eliminating these 'distortions' imposed on the market, its 'free and invisible' mechanisms would allow for a more efficient allocation of capital, leading to increases in welfare (through growth; that is, by means of neoclassical 'virtuous circles') in both central and peripheral countries.…”

Section: Introductionmentioning

confidence: 99%

“…Associated with this process of financial liberalization, a phenomenon of financial globalization-beginning in the early 1970s-had also taken place [9]. It involves the growth of international financial markets and the exponential increase of international capital flows, as well as an increasing participation of foreign financial agents and international financial institutions in the hitherto domestic financial markets, as well as in the world economic and financial scene as a whole.…”

Section: Introductionmentioning

confidence: 99%

“…Although the process of financialization is structurally different from the other two [9,10], they are extremely well-connected. Specifically in the case of the countries from the Global South (and unlike what happens in the countries of the center, where the process is usually associated with 'domestic' or 'internal' causes), it is considered a process with 'external' causes related to capital account liberalization and free international capital flows.…”

Section: Introductionmentioning

confidence: 99%

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When Land Meets Finance in Latin America: Some Intersections between Financialization and Land Grabbing in Argentina and Brazil

et al. 2021

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Financialization is one of the most relevant processes embedded in the functioning and evolution of the contemporary capitalist model and presents differential characteristics in the peripheral economies of the world-system. In turn, land grabbing is also one of the most relevant phenomena taking place in the field of farmland and land use, with particular significance also within the Global South. After presenting an in-depth analysis of both phenomena for Latin America, we specifically study the case of the two Latin American countries (Argentina and Brazil) where land grabbing has a greater qualitative and quantitative importance. In our article, we analyze the main interrelationships between both processes and show how financialization has played a fundamental role (together with the policies designed and the de-regulations implemented by respective states, and the participation of other domestic actors) in the land grabbing process in both countries.

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Financialisation in developing countries: approaches, concepts, and metrics

Cited by 16 publications

References 90 publications

The (un)usual suspects? Exploring the links between illicit financial flows, Russian money laundering and dependent financialization in the Baltic states

The (un)usual suspects? Exploring the links between illicit financial flows, Russian money laundering and dependent financialization in the Baltic states

Financialisation, central banks and ‘new’ state capitalism: The case of the US Federal Reserve, the European Central Bank and the Bank of England

When Land Meets Finance in Latin America: Some Intersections between Financialization and Land Grabbing in Argentina and Brazil

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