Hey we struggle with that question constantly here in South Africa. Probably the best recent citation is the Epstein/Crotty article on capital controls in the 1996 Socialist Register (editor is Leo Panitch, publishers Merlin and Monthly Review). Our Reserve Bank governor hiked interest rates again last month (they're above 10% in real terms) just so capital would stay in the country and the 3-months of hard currency reserves wouldn't dry up. And there's continual pressure from financiers for SA to take on an IMF loan of several billion so there'll be sufficient reserves so as to fully liberalise exchange controls (at present local residents can only slip funds out through major institutional investors, and then only up to 10% and through asset swaps). Extremely frustrating situation; even the business editor at the lib-left newspaper (Mail and Guardian) has endorsed liberalisation (though it brings no known advantages), and our attempts to remind folk that in July 1995 even the IMF suggested that Mexico should have had controls on incoming hot money have had no power-audience at all. It's that crazy down here, amongst the ruling crew.
