About.

What is FLAS?

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​Though the proponents of economic liberalism worldwide expected the downfall of illiberal regimes as markets became increasingly connected, these predictions remain far from being accurate today. Rather, liberal ideas and the policy instruments inspired by them are central to the reproduction of authoritarian regimes. In addition to capital account liberalization  and privatization of banking systems, some of the prominent measures employed by authoritarian regimes include creating free financial zones, designating off-shore investment areas and building complementary financial systems. 

​How have liberal ideas come to influence the policy choices of illiberal regimes?


​To what extent does financial liberalization create new opportunities for political survival in areas beyond liberal democracies?

​METHODOLOGY

This project employs the principles of nested analysis  to test the hypotheses and combines qualitative case studies with Large-N observational data.

QUALITATIVE CASE COMPARISONS

​We think variations across rentier and non-rentier autocrats encourage these regimes to follow different financial market building strategies to secure political survival. In autocracies where economy is diversified, the rulers are more likely to create a coterie of pro-government elites through financial liberalization and adopt reforms that seek to either create new loyalties or strengthen existing ones. On the other hand,  oil-rich authoritarian settings are more likely to remove capital mobility restrictions for overseas investments–including in offshore areas–and prioritize the creation of financial free zones in geographically and legally confined areas to facilitate the collection of financial rents. Finally, in fragile democracies that welcome financial liberalization reforms, new policies are intensely contested by the winners and losers, which open the door to democratic backsliding. 

A NEW DATASET

​The Large-N dataset covers countries in the MENA region, Central Asia, South and Southeast Asia and sub-Saharan Africa. It allows for a systematic exploration of the relationship between regime survival and financial liberalization, including information on regime type and age, political institutions, the ruling government and duration of exposure to reforms (such as  share market reforms, bond market reforms and money market reforms). We will also include information on the presence and size of sovereign wealth funds (if any) as well as regulations on investment in offshore financial free zones, in addition to those that are regulated by the government in the domestic market.