Hostname: page-component-848d4c4894-hfldf Total loading time: 0 Render date: 2024-05-06T13:45:33.813Z Has data issue: false hasContentIssue false
  • English
  • Français

Trading sovereignty for stability? The political economy of monetary integration

Published online by Cambridge University Press:  14 July 2010

JESSE RUSSELL
Get access Rights & Permissions [Opens in a new window]

Abstract

How do states attempt to mitigate the pressures of financial globalisation? This article suggests that options can be understood in terms of monetary regime choice. These are best understood with their international component included – whether states integrate unilaterally, integrate multilaterally, or go it alone monetarily. But to understand the international side of monetary relations, one must look to domestic political structures, histories and politics. It is important that to understand that within the pressures of the international system, domestic politics is a fons et origo determining the health and stability of international economic relations.

Type
Research Article
Information
Review of International Studies , Volume 37 , Issue 2 , April 2011 , pp. 673 - 690
Copyright
Copyright © British International Studies Association 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 See Grace Juhn and Paolo Mauro, ‘Long-Run Determinants of Exchange Rate Regimes: A Simple Sensitivity Analysis’, IMF Working Paper WP/02/104 (2002); and Zhou, Jurgen von Hagen and Jizhong, ‘The Choice of Exchange Rate Regimes in Developing Countries: A Multinomial Panel Analysis’, Journal of International Money and Finance, 26 (2007), pp. 1071–1094Google Scholar .

2 This article uses the term integration, but it should be noted that integration might also be referred to as regionalisation, as it is in Cohen, Benjamin J., The Geography of Money (Ithaca: Cornell University Press, 1998)Google Scholar , and Cohen, Benjamin J., The Future of Money (Princeton: Princeton University Press, 2004)Google Scholar .

3 Mundell, Robert, ‘The Appropriate Use of Monetary and Fiscal Policy of Internal and External Stability’, IMF Staff Papers, 9 (1962), pp. 70–79Google Scholar ; Mundell, Robert, ‘Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange Rates’, The Canadian Journal of Economics and Political Science, 29 (1963), pp. 475–485Google Scholar .

4 Cèspedes, Louis Felipe, ‘On the Choice and Consequence of Exchange Rate Regimes’, International Finance, 8 (2005), pp. 151–166CrossRefGoogle Scholar .

5 Widmaier, Wesley, ‘Constructing Monetary Crises: New Keynesian Understandings and Monetary Cooperation in the 1990s’, Review of International Studies, 29 (2003), pp. 61–77Google Scholar ; Widmaier, Wesley, ‘The Social Construction of the ‘Impossible Trinity’: The Intersubjective Bases of Monetary Cooperation’, International Studies Quarterly, 48 (2004), pp. 433–453Google Scholar .

6 Widmaier, ‘Social Construction’, p. 449.

7 The CFA Franc Zone is really two currency unions each with its own central bank. Benin, Burkina, Côte d'Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo form the West African Economic and Monetary Union (WAEMU), whose common central bank is the Central Bank of West African States (BCEAO); Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad form the Central Africa Economic and Monetary Community (CEMAC), whose common central bank is the Bank of Central African States (BEAC).

8 Cohen, The Geography of Money, and Cohen, The Future of Money, (see n. 2 above).

9 Olsen, Mancur, ‘Autocracy, Democracy and Prosperity’, in Zeckhauser, Richard (ed.), Strategy and Choice (Cambridge: MIT Press, 1991), p. 153Google Scholar .

10 Fearon, James, ‘Domestic Political Audiences and the Escalation of International Disputes’, American Political Science Review, 88 (1994), pp. 577–592CrossRefGoogle Scholar .

11 Fearon, ‘Domestic Political Audiences’, p. 578.

12 Gaubatz, Kurt Taylor, ‘Democratic States and Commitment in International Relations’, International Organization, 50 (1996), pp. 109–139Google Scholar ; Remmer, Karen, ‘Does Democracy Promote Interstate Cooperation? Lessons from the Mercosur Region’, International Studies Quarterly, 42 (1998), pp. 25–52Google Scholar ; Martin, Lisa, Democratic Commitments: Legislatures and International Cooperation (Princeton: Princeton University Press, 2000)Google Scholar ; Cowhey, Peter, ‘Domestic Institutions and the Credibility of International Commitments: Japan and the US’, International Organization, 47 (1993), pp. 299–326Google Scholar ; MacIntyre, Andrew, ‘Institutions and Investors: The Politics of Economic Crisis in Southeast Asia’, International Organization, 55 (2001), pp. 81–122Google Scholar .

13 Gaubatz, ‘Democratic States’, p. 122.

14 Ibid.

15 Remmer, ‘Does Democracy Promote Interstate Conflict?’, p. 42.

16 Hallerberg, Mark, ‘Veto Players and the Choice of Monetary Institutions’, International Organization, 56 (2002), p. 776CrossRefGoogle Scholar .

17 McNamara, Kathleen, The Currency of Ideas (Ithaca: Cornell University Press, 1999), p. 8Google Scholar .

18 Jaggers, Monty Marshall and Keith, Polity IV Dataset (College Park, MD: Center for International Development and Conflict Management, University of Maryland, 2005)Google Scholar .

19 Stasavage, Philip Keefer and David, ‘The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy’, International Organization, 97 (2003), pp. 407–23Google Scholar ; Keefer, Philip, DPI 2000, Database of Political Institutions: Changes and Variable Definitions (Washington DC.: Development Research Group, The World Bank, 2002)Google Scholar .

20 Keefer, DPI 2000, p. 9.

21 Adalbert Knoble, Andres Sutt and Basil Zavoico, ‘The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy’, IMF Working Paper 02/96 (2002).

22 Abdelal, Raw, National Purpose in the World Economy (Ithaca: Cornell University Press, 2001), p. 46Google Scholar .

23 Estonia, Bank of, The Monetary Reform in Estonia (Tallinn: Bank of Estonia, 1992)Google Scholar .

24 Hansson, Ardo, ‘The Estonian Kroon: Experiences of the First Year’, in Portes, Richard (ed.), The Economics of New Currencies (London: Center for Economic Policy Research, 1993), pp. 85–107Google Scholar .

25 Lindberg, Hans, Söderlind, Paul and Svensson, Lars, ‘Devaluation Expectations: The Swedish Krona 1985–92’, The Economic Journal, 103 (1993), pp. 1170–1179CrossRefGoogle Scholar .

26 Calmfors, Lars, Flam, Harry and Gottfries, Nils, EMU: A Swedish Perspective (Boston: Kluwer Academic Publishers, 1997), p. 335CrossRefGoogle Scholar . (This is the English translation of Sverige och EMU, Statens Offentliga Utredningar).

27 Financial Times (19 January 1999).

28 The Economist (20 September 2003).

29 Ibid.

30 Ibid.

31 Helleiner, Eric, ‘National Currencies and National Identities’, The American Behavioral Scientist, 41 (1998), pp. 1409–1436CrossRefGoogle Scholar .

32 McNamara, The Currency of Ideas, p. 8.

33 Long, Scott, Categorical and Limited Dependent Variables (Thousand Oaks: Sage, 1997), p. 149Google Scholar .

34 Gray, Colin Begg and Robert, ‘Calculation of Polychotomous Logistic Regression Parameters Using Individualised Regressions’, Biometrika, 71 (1984), p. 17Google Scholar .

35 Nagler, Michael Alvarez and Jonathan, ‘When Politics and Models Collide: Estimating Models of Multiparty Elections’, American Journal of Political Science, 42 (1998), p. 55Google Scholar .

36 Ibid.

37 Ibid.