The International Division of Finance: reassessing the peripheral condition in a financialised capitalism

Abstract

Based on the Latin American structuralist theory, but advocating for a need of framing the discussions in the current historical context–characterised by financialisation and financial globalisation –, this article investigates the centre-periphery configuration of the global economy with the focus on the monetary-financial sphere. More specifically, it aims to analyse the role of the peripheral countries for the current International Monetary and Financial System (IMFS). In a dialogue with the discussions related to the International Division of Labour (IDL), the article thence proposes and conceptualises the International Division of Finance (IDF), as well as its corresponding structural differentiation and structural tendency. It argues that the IDF is not accidental, but plays a fundamental role in the modus operandi of the reproduction of wealth in international financial circuits. Through an empirical analysis with data from 212 countries for the period 2000-23, the article demonstrates a structural tendency of transfer of wealth from periphery to central countries. Along with the IDL (in its contemporary format), it generates a ‘double-capture of wealth’. As a result, the IDL and the IDF have feedback effects, deepening the subordination, the lack of autonomy for economic policy and the vulnerability of peripheral countries.