This book examines the degree to which international financial markets affect governments' policy choices. It provides empirical evidence as to whether financial globalization creates pressures on governments of developed and developing nations to pursue similar policies and to reduce spending on social policies. The book suggests that financial globalization does not lead to a "race to the bottom" among governments, especially in developed nations. It deploys several types of evidence; the most unique are interviews and surveys of investment fund managers. It also compares contemporary government-financial market relations to those prior to World War I.