This article critiques capital market liberalization policies for inhibiting planning and producing results that are negative for many people throughout the world. Capital market liberalization is part of a broader set of economic development policies that constitute a development model that fails to distribute benefits and costs of economic integration in a manner that improves living standards for people most in need. After a discussion of trends in capital flows, the author critiques the theory behind liberalization in terms of limits placed on demand-side public policies, its narrow efficiency criterion, and its tendency to crowd out socially useful investment in favor of short-term returns. The article concludes with a discussion of national and regional planning implications and argues that liberalization is antiplanning because it limits the use of traditional planning policies. The author also considers alternatives including those implied by the development activity of the European Union and a new hemispheric proposal, Alternatives for the Americas.
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