Haute Finance and High Theory: Recent Scholarship on Global Financial Relations

In surveying the literature on global financial relations, this essay suggests that (1) states have not “surrendered” or “retreated” but reinterpreted their roles relative to global finance, (2) interstate cooperation is pervasive but fragile, and (3) capital mobility has not yet altered the structures of the international system. Although states have abandoned or lost a number of traditional roles with regard to global finance, they have also assumed new responsibilities. In particular, they have pursued interstate cooperation and state-to-firm “diplomacy” in the face of cross-border financial crises, the increasing power of transnational financial services firms, common regulatory objectives, and the pervasive desire for strong economic growth. Thus, even as the power and influence of private actors, institutions, and markets have grown enormously in the international system as a whole, states continue to shape outcomes.