Where governance fails: Advanced business services and the offshore world
TL;DR: In this paper, the authors revisited the literatures on financial geographies, advanced business services, world cities and offshore financial centres and argued that the advanced business service hold considerable power, which they exercise by operating legal and financial vehicles designed to escape the control of governmental or intergovernmental organizations through the use of offshore jurisdictions.
Abstract: The paper revisits the literatures on financial geographies, advanced business services, world cities and offshore financial centres. Linking these bodies of research, the paper argues that the advanced business services hold considerable power, which they exercise by operating legal and financial vehicles designed to escape the control of governmental or intergovernmental organizations through the use of offshore jurisdictions. This nexus of advanced business services and the offshore world has negative consequences for stability and equity, and represents an important area of governance failure.
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TL;DR: In this paper, the authors focus on transnational wealth elites buying residential properties in New York and London as an investment rather than as a primary residence, and map the consequences of the safe deposit box function of real estate, in terms of not only house pri...
Abstract: The paper focuses on transnational wealth elites buying residential properties in New York and London as an investment rather than as a primary residence. The transnational wealth elite is a group of people that have their origin in one locality, but invest their wealth transnationally since they entertain transnational jobs, assets and social networks. New York and London real estate has the unique quality that it is perceived to be highly liquid, i.e. easily resold to other investors. Together with the safe haven and socio-cultural characteristics of both cities and the way the real estate market and its professionals are organised, global city residential real estate functions as a ‘safe deposit box’. The paper brings together different geographies: of the wealth elite, of offshore financial centres through which most real estate purchases are organised, and of real estate investment locations. It also maps the consequences of the safe deposit box function of real estate, in terms of not only house pri...
188 citations
TL;DR: Coe et al. as discussed by the authors distils the concept of the global financial network from financial geography and related scholarship, with advanced business services, world cities and offshore jurisdictions at the core.
Abstract: Coe N. M., Lai K. P. Y. and Wojcik D. Integrating finance into global production networks, Regional Studies. While successful in its aim of ‘globalizing’ regional development, the global production network (GPN) approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development. This lacuna is significant as finance is arguably even more globalized and networked than production. To address this gap the paper distils the concept of the global financial network (GFN) from financial geography and related scholarship, with advanced business services, world cities and offshore jurisdictions at the core. Interactions between the GPN and the GFN are discussed, focusing on the financing and financializing of GPNs and the co-evolution of globalization and financialization. Integrating finance into GPN research entails more than a simple extension of the approach; it would also enrich it conceptually, and enable it methodologically and empirically.
166 citations
TL;DR: In this article, the authors argue that the world city archipelago remains an obligatory passage point for the relatively assured realization of capital and that the advanced producer services complex appropriates superprofits as producers of co-constitutive knowledge on operational and financial firm restructuring.
Abstract: This paper interrogates the enduring yet changing role of world cities as centers of capitalist ‘command and control’ amidst deepening uneven development. By incorporating financialization processes in Friedmann’s (1986) world city hypothesis, we hypothesize that the world city archipelago remains an obligatory passage point for the relatively assured realization of capital. The advanced producer services complex appropriates superprofits as producers of co-constitutive knowledge on operational and financial firm restructuring, the creation of new circuits of value, and capital switching. Geographically, beyond the international financial center shortlist, the wider world city archipelago inserts finance capital (logics) in contemporary economies and societies.
102 citations
TL;DR: The Financial Secrecy Index (FSI) as discussed by the authors ranks countries and jurisdictions according to their contribution to opacity in global financial flows, revealing a quite different geography of financial secrecy from the image of small island tax havens.
Abstract: Both academic research and public policy debate around tax havens and offshore finance typically suffer from a lack of definitional consistency. Unsurprisingly then, there is little agreement about which jurisdictions ought to be considered as tax havens—or which policy measures would result in their not being so considered. In this article we explore and make operational an alternative concept, that of a secrecy jurisdiction and present the findings of the resulting Financial Secrecy Index (FSI). The FSI ranks countries and jurisdictions according to their contribution to opacity in global financial flows, revealing a quite different geography of financial secrecy from the image of small island tax havens that may still dominate popular perceptions and some of the literature on offshore finance. Some major (secrecy-supplying) economies now come into focus. Instead of a binary division between tax havens and others, the results show a secrecy spectrum, on which all jurisdictions can be situated, and that ...
87 citations
TL;DR: In this paper, principal component analysis is employed to decompose the global bilateral FDI anomaly matrix into its primary constituent subnetworks, with a centralized core of jurisdictions in Northwest Europe and the Caribbean exercising a largely homogenous worldwide influence.
Abstract: While foreign direct investment (FDI) is generally assumed to represent long-term investments within the real economy, approximately 30–50 percent of global FDI is accounted for by networks of offshore shell companies created by corporations and individuals for tax and other purposes. To date, there has been limited systematic research on the global structure of these networks. Here we address this gap by employing principal component analysis to decompose the global bilateral FDI anomaly matrix into its primary constituent subnetworks. We find that the global offshore FDI network is highly globalized, with a centralized core of jurisdictions in Northwest Europe and the Caribbean exercising a largely homogenous worldwide influence. To the extent that the network is internally differentiated, this appears to primarily reflect a historic layering of social and political relationships. We identify four primary offshore FDI subnetworks, bearing the imprint of four key processes and events: European, particularly UK colonialism, the post–WWII hegemonic alliance between the United States and Western Europe, the fall of Soviet communism, and the rise of Chinese capitalism. We also find evidence of qualitative, but not quantitative, variation in offshore FDI based on national rule of law and communist history.
80 citations
References
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Book•
01 Jun 2002
TL;DR: The promise of global institutions broken promises freedom to choose, the East Asia crisis - how IMF policies brought the world to the verge of a global meltdown who lost Russia? unfair trade laws and other better roads to the market the IMF's other agenda the way ahead.
Abstract: The promise of global institutions broken promises freedom to choose? the East Asia crisis - how IMF policies brought the world to the verge of a global meltdown who lost Russia? unfair trade laws and other mischief better roads to the market the IMF's other agenda the way ahead.
6,541 citations
TL;DR: In this paper, the authors address the question of how technological transitions (TT) come about and identify particular patterns and mechanisms in transition processes, defined as major, long-term technological changes in the way societal functions are fulfilled.
5,020 citations
TL;DR: Arrighi argues that the history of capitalism has unfolded as a succession of "long centuries" - ages during which a hegemonic power deploying a novel combination of economic and political networks secured control over an expanding world-economic space as mentioned in this paper.
Abstract: This work traces the epochal shifts in the relatiohsip between capital accumulation and state formation over a 700-year period The author synthesizes social theory, comparative history and historical narrative in this account of the structures and agencies which have shaped the course of world history over the millennium Borrowing from Braudel, Giovanni Arrighi argues that the history of capitalism has unfolded as a succession of "long centuries" - ages during which a hegemonic power deploying a novel combination of economic and political networks secured control over an expanding world-economic space But this is not simply history confined to the "longue duree" The modest beginnings, rise and violent unravelling of the links forged between capital, state power and geopolitics by hegemonic classes and states are explored Arrighi argues that a specific logic governed the concentration of power and eventual surrender of control over the strategic sites of commercial, financial and political power From this perspective, he explains the changing fortunes of Florentine, Venetian, Genoese, Dutch, English and, finally, American capitalism The book concludes with an examination of the forces which have shaped and are now poised to undermine America's world power Giovanni Arrighi is the author of "The Geometry of Imperialism", and the co-author of "Antisystemic Movements" and "Dynamics of Global Crisis"
1,861 citations
TL;DR: In this article, the authors propose a framework for the analysis of economic integration and its relation to the asymmetries of economic and social development, which is more adequate to the exigencies and consequences of globalization than has traditionally been the case in development studies.
Abstract: This article outlines a framework for the analysis of economic integration and its relation to the asymmetries of economic and social development. Consciously breaking with state-centric forms of social science, it argues for a research agenda that is more adequate to the exigencies and consequences of globalization than has traditionally been the case in 'development studies'. Drawing on earlier attempts to analyse the cross-border activities of firms, their spatial configurations and developmental consequences, the article moves beyond these by proposing the framework of the 'global production network' (GPN). It explores the conceptual elements involved in this framework in some detail and then turns to sketch a stylized example of a GPN. The article concludes with a brief indication of the benefits that could be delivered by research informed by GPN analysis.
1,809 citations