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  • April 2002 (Revised September 2002)
  • Background Note
  • HBS Case Collection

Capital Controls

By: Rawi E. Abdelal and Laura Alfaro
  • Format:Print
  • | Pages:4
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Abstract

Only in the waning years of the 20th century did international financial markets begin to enjoy the freedom from government regulation that they had experienced before the first world war. By 2002, international capital markets had grown to be enormous--$1.2 trillion flowed around the globe per day. The massive size of the market presented policy makers with a serious challenge as they were forced to grapple with the costs and benefits of such mobile capital. This note briefly relates the modern history of capital controls and summarizes scholarship on the advantages and disadvantages of international financial market regulation.

Keywords

History; Policy; Business and Government Relations; Change Management; Cost vs Benefits; Governance Controls; Governance Compliance; Emerging Markets; Financial Markets; Network Effects; Banking Industry; Financial Services Industry

Citation

Abdelal, Rawi E., and Laura Alfaro. "Capital Controls." Harvard Business School Background Note 702-082, April 2002. (Revised September 2002.)
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About The Authors

Rawi E. Abdelal

Business, Government and the International Economy
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Laura Alfaro

General Management
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More from the Authors
  • Doing Business in Boston, Massachusetts By: Laura Alfaro, Leonard A. Schlesinger and Zeke Gillman
  • Regimes of Political Economy By: Rawi Abdelal and Sophus A. Reinert
  • Are the West’s Sanctions on Russia Working? By: Rawi Abdelal and Alexandra Vacroux
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