Peripheral expertise: Latin American paths to combat financial tsunamis

The financial crisis of 2007 initiated the slow death of Western neoliberalism. Policymakers and economists in Western countries have begun rethinking long-held truths about economic and financial governance and developed new policy instruments to reregulate the financial system. But looking beyond the Western world, this rise of new ideas and practices to regain control over an inherently unstable global financial system is nothing new. Strikingly similar ideas and techniques have already been developed in peripheral countries since the 1970s. Drawing on interview data, document analyses, and descriptive statistics, this paper finds that their subordinated position in the global financial system increased pressure on policymakers and academics in the periphery to adjust their expertise and develop policies that help them offset these volatilities. Using the cases of Chile and Argentina, this paper argues that the translation of local-pragmatic, in contrast to universal-academic, expertise has fared better in achieving this objective. Pragmatism, learning mechanisms, and the national production of expertise are linked to a more stable integration of peripheral countries in a global financial system. Given that private interests are not much concerned about the issue of financial stability, governments are in a key position to promote these enabling factors.