Capital controls in developing countries and the restrictions on the international financial market. An empirical analysis of the impact of domestic politics on financial openness.

Despite the increasing integration of developing countries into the world markets these countries still hold many restrictions on international capital flows. In this work I try to explain these apparently paradoxical findings with domestic factors assuming a political economy of capital controls and to check the underlining hyotheses empirically by means of statistical analysis of the data of 89 developing countries from 1978 to 1999.The theoretical model consists of three types of independent variables: political, economical and institutionalist ones.The statistical analysis backed the model only partially and statistically not significantly. One may assume that the classification of countries was too rough and that some of the independant variables could not be operationalized correctly. It is up to future studies to design better concepts in this relatively new field of political economy