ABSTRACT
This chapter shows how capital controls and Keynesian demand management policies were firmly ensconced and viewed as successful, on the eve of the international financial revolutions of the 1970s and 1980s, as a result of intentional actions. It explains the definition to include the dependence of states on non-state transnational actors and examines how states have attempted to temper the structural power of non-state actors through regimes. The chapter argues that while large powerful states may “create” regimes, they do so largely because their macroeconomic structure is conducive to the promotion of a more liberal international order. Macroeconomic adjustment policies have changed since the 1960s in response to changing economic structures and corresponding patterns of interdependence in the global economy, and in particular to the growth of international capital mobility. The constraints on macroeconomic policymaking autonomy imposed by international capital mobility are best understood as an unintended consequence of earlier choices to liberalize trade and investment.
