Abstract

National economies are embedded in complex networks such as trade, capital flows, and intergovernmental organizations (igo s). These globalization forces impose differential impacts on national economies depending on a country’s network positions. This article addresses the policy convergence-divergence debate by focusing on how networks at the international level affect domestic fiscal, monetary, and regulatory policies. The author presents two hypotheses: first, similarity in network positions induces convergence in domestic economic policies as a result of peer competitive pressure. Second, proximity in network positions facilitates policy learning and emulation, which result in policy convergence. The empirical analysis applies a latent-space model for relational/dyadic data and indicates that position similarity in the network of exports induces convergence in fiscal and regulatory policies; position similarity in the network of transnational portfolio investments induces convergence in fiscal policies; and position proximity in igo networks is consistently associated with policy convergence in fiscal, monetary, and regulatory policies.

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Additional Information

ISSN
1086-3338
Print ISSN
0043-8871
Pages
pp. 375-425
Launched on MUSE
2012-07-10
Open Access
No
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