When Mexico's peso crisis occurred in December 1994, all of Latin America experienced the 'tequila effect'. In January 1998, after seven months of financial turmoil in East Asia, Alan Greenspan, the usually reticent Chairman of the US Federal Reserve Bank, noted that such 'vicious cycles...may, in fact, be a defining characteristic of the new high-tech international financial system'. This book examines the impact of the new, highly liquid portfolio capital flows on governments, opposition, politicians, business and the workforce in such emerging market countries as Mexico, Brazil, Russia, Indonesia, Vietnam, Thailand and Indonesia. Hailed as 'exemplary and innovative', 'fine-grained and accessible' and 'a must read', this collection of original essays in newly available in paperback.

LESLIE ELLIOTT ARMIJO is Visiting Scholar, Reed College, Oregon, USA. She has published numerous articles on the interaction of democratization and economic liberalization in developing and transitional countries, the game of inflation in Brazil, and the politics of privatization and market-oriented economic reforms in South America, Mexico, and India.

List of Tables List of Figures Notes on the Contributors Foreword; T.J.Biersteken List of Abbreviations Introduction and Overview; L.E.Armijo PART I: DEMOCRACY AND THE EVOLUTION OF GLOBAL CAPITAL MARKETS Mixed Blessing: Expectations about Foreign Capital Flows and Democracy in Emerging Markets; L.E.Armijo Capital Flows to Developing Economies throughout the Twentieth Century; S.Manzocchi Emerging Market Makers: The Power of Institutional Investors; M.A.Haley The Transnational Agenda for Financial Regulation in Developing Countries; T.Porter PART II: COUNTRY CASES Mexico: The Trajectory to the 1994 Devaluation; W.C.Gruben Mexico: Foreign Investment and Democracy; C.E.Mayer-Serra Brazil: Short Foreign Money, Long Domestic Political Cycles; P.R.Kingstone Russia: The IMF, Private Finance and External Constraints on a Fragile Polity; R.Stone India: Financial Globalization, Liberal Norms and the Ambiguities of Democracy; J.Echeverri-Gent Indonesia: On the Mostly Negative Role of Transnational Capital in Democratization; J.A. Winters Vietnam and Foreign Direct Investment: Speeding Economic Transition or Prolonging the Twilight Zone?; J.Haughton Thailand: What Goes Up...; D.Unger PART III: CONCLUSIONS Tequila versus the Dragon: Comparing the Crises in Mexico and Thailand; W.Molano Mixed Blessing: Preliminary Conclusions; L.E.Armijo Index