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Abstract:
The purpose of this essay is to describe the recent internationalization of capital, and to explore the implications for the industrialized countries of the Organization for Economic Cooperation and Development (OECD). The first section describes capital controls under the Bretton Woods regime and their subsequent liberalization. Bretton Woods endorsed capital controls, but these were relaxed in the 1970s and virtually eliminated in the 1980s and 1990s in most OECD countries. The second section describes the increase in transnational capital movements, and the third reviews the evidence of capital market integration since the 1960s. The fourth section explores the consequences of more integrated capital markets on national politics and policy making, and the final section offers conclusions.