Welfare Implications of Financial Liberalization in Thailand: a Cost-Benefit Analysis

Over the past three decades, a smorgasbord of inter- and intra-dependent development issues, processes, innovations and public policies have intersected and accelerated social and economic change resulting in what is commonly referred to as globalization and (its by-product) financial liberalization (Bird & Rajan, 2001 - for a review of the welfare and political issues (see Sen (1999), Gilpin (2001)). It is possible to analyse financial liberalization from a social welfare perspective. Within development economics, two pertinent contemporary issues that impact on social welfare associated with globalization include the rise of the knowledge economy and financial liberalization. Over the last three decades, most economies have moved towards financial liberalization - international economic deregulation. This deregulation has resulted in dismantling of trade barriers such as tariffs in both goods and services, relaxation of control over capital markets (including floating currencies and deregulation of financial markets and direct foreign investments), and the deregulation of internal markets for goods and services