Ph.D. Candidate in Political Science, Yale University
I am a Ph.D. Candidate in Political Science at Yale University. I study international and comparative political economy. My research focuses on the political economy of sovereign debt, examining how domestic and international politics shape governments’ decisions regarding sovereign borrowing and lending, repayment and default, and debt restructuring in the contemporary era of financial globalization. I hold a B.A. with highest honors in Political Science and Diplomacy and Economics (double major; summa cum laude), as well as an M.A. in Political Science, from Yonsei University, Korea.
joonhyeok.lee@yale.edu
115 Prospect Street
Department of Political Science
Yale University
Despite the frequent use of economic sanctions by states, there are insufficient analyses of the collateral effects of these measures on target states. Under the sanctions, targeted leaders who pursue the longevity of their regimes adjust domestic policies to mitigate the costs associated with sanctions. Specifically, this article analyzes the effects of sanctions on capital account liberalization in target states. Economic sanctions trigger changes in the capital account openness of target states. However, the direction of the reform is dependent on the political institutions in target states, which characterize the behavioral incentive structure of the leaders. Specifically, economic sanctions lower capital account openness, albeit only in autocracies. Democracies, which are sensitive to the benefits of capital account openness, are less likely to tighten the restrictions. Instead, they are likely to open their markets. I employ the two-way fixed approach to test my argument, using time-series cross-sectional data spanning 145 countries for the period 1965–2005. In this regard, I find evidence in favor of my argument, with the findings suggesting the indirect impact of economic sanctions on target states’ financial policies on which the decisions are primarily driven by the political incentives of the targeted leaders.
Central bank independence (CBI) has been widely advocated as a means to address the time-inconsistency problem of controlling inflation. Consequently, many countries have embraced central bank reforms since the 1990s. While extant research in political science has sought to unveil the consequences of CBI, there remains an unexplained variation in the response of countries with regard to capital account openness. Notably, a positive association exists between CBI and capital account openness due to the constraints CBI places on leaders' discretionary monetary and fiscal policies, thereby fostering reliance on financial policy to boost their economies. However, this relationship is contingent on the domestic political contexts of countries. CBI leads to capital account liberalization only when the rule of law is guaranteed, given that CBI is often stipulated by laws. Therefore, in countries where political leaders can easily override formal rules, CBI shows no discernible impact on capital account openness. Employing two-way fixed-effects and error-correction models, the study reveals that CBI increases capital account openness only in democracies, in the presence of multiple veto players, and a high level of transparency. The findings underscore the pivotal role of the domestic political environment in analyzing how CBI constrains political leaders.
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