The International Monetary Fund has rethought its doctrine on capital controls. The IMF, which previously favored unfettered flows of money across borders, now accepts that controls are sometimes necessary.
This is a real improvement, yet it’s incomplete because it lacks a mechanism for supervision and enforcement. The fund can’t rectify that omission by itself. Member governments can and should.
The previous orthodoxy said that restricting international flows of capital is almost always wrong: The benefits of liberalized capital markets exceed the costs. Even before the global recession that started in 2008, successive financial crises had challenged this idea. Surging capital flows are capable of destabilizing and even overwhelming the financial systems of developing countries.
looking beyond borders 