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What impact are new global financial standards having on low income countries?
Over the next three years, Dr Emily Jones and Professor Ngaire Woods from the Global Economic Governance Programme at the Blavatnik School of Government, and Professor Thorsten Beck from Cass Business School, will lead a team of researchers to examine how low income countries (LICs) in Africa and South East Asia are affected by new global standards for regulating banks. The team won a grant worth £521,000 from the DFID-ESRC Growth Research Programme to fund this research project, which started on 30 March 2015.
In the wake of the global financial crisis, industrialized countries have agreed a series of regulatory reforms to repair and regulate their own financial systems. All countries, including LICs, are encouraged to adopt these new global standards. Members of the G20 have asked the Financial Stability Board, International Monetary Fund, and World Bank to study how global banking initiatives will impact developing and emerging economies, identifying this area as a key policy concern in efforts to promote inclusive growth. To date, the scant research on this question almost exclusively addresses emerging market economies. LIC governments and advisers have voiced an urgent need for LIC-specific analysis.
The GEG project will be among the very first to look at how political institutions and processes — at both the domestic and global levels — shape the impact of global banking initiatives on LICs and their ability to harness financial flows for inclusive growth.
The core research questions are:
- How much de facto flexibility do LICs have in respect of the new regulatory standards, how much do they need, and under what conditions (economic and political; global, regional, and national) should they adopt new regulatory standards?
- What strategies for influencing global standard-setting processes and institutions are likely to yield the best outcomes for LICs?
The team includes researchers from academic institutions in Burkina Faso, Togo, Kenya, and Vietnam, and will involve close engagement with senior policymakers in LICs. The programme will combine the disciplinary approaches of political science and economics, and will draw on a combination of quantitative and qualitative analysis. Outputs will include top-quality peer-reviewed academic publications and a series of tailored policy briefs.