We first constructed the index 20 years ago (Chinn and Ito, NBER WP No. 8967)!See website for data.
This is a map of financial openness in 2020 (normalized index, 1 to 0). The darker it is, the more open it is.
The description of the current dataset is Ito and Chin (2022).
This is Hero I constructed this index because there was little single, widely available and continuously updated measure of financial openness, except Quinn (APSR1997) measures, the coverage at the time was more limited.IMF (old) based single dummy variable in Law In one of my early empirical analyses of financial development (Chinn, 2004, Doorless version is here). The Chinn-Ito index, based on the above IMF jurisprudence classification, is converted into a single index by taking the first principal component (essentially the smoothed capital account component), and developed for projects that assess the degree of financial openness related to financial development, published in go (2006) (With the help of many friends, including Ashok Mody, Antu Panini Murshid).
Quinn, Schindler, and Akio Toyoda (IMF Economic Revision 2011) Provides an early comparison of measures.The most recent comparison is Grebner et al. (2021) and ERten et al. (2021). In general, the measures are moved together.
resource:Erten, Korinek, Ocampo (Gyal2021).
However, on a country-by-country basis, the correlation between changes in the KAOPEN index and changes in the other indices ranged from 0.01 to 0.29 (the latter being significantly different from zero).
Ito and I are not claiming that there are no better metrics.For example, by Fernández, Klein, Rebucci, Schindler and Uribe (2016) is based on the IMF’s more detailed table of legal restrictions, including inflow and outflow flows, and may better capture the effects of controls. However, the coverage of the index is limited to after 1995, limiting the scope of data that can be statistically analyzed.
The image above shows a snapshot of financial opening. What does our index say about the evolution of financial openness over the past decade (2010-2020)? Here is a graph of changes in our index.
The darker the color, the greater the increase in measured financial openness.
Note that financial openness is largely stable; in the map above, most countries experience 0 changes in ka_open (eg, China).
