Composite index that measures “de jure” financial globalization by considering investment restriction, capital accounts openness and international investment agreements. The index is part of the KOF Globalisation Index and consists of: 1) investment restriction as measured by the prevalence of foreign ownership and regulations to international capital flow; 2) capital account openness as measured by the Chinn-Ito Index of capital account openness; and 3) international investment agreements as measured by the number of bilateral investment agreements (BITs) and treaties with investment provisions.

Why do countries open their economies to global capital markets? A number of recent articles have found that two types of factors encourage politicians to liberalize their capital accounts: strong macroeconomic fundamentals and political pressure from proponents of open capital markets. However, these conclusions need to be re-evaluated because the most commonly used measure of capital account openness, Chinn and Ito's (2002) Kaopen index, suffers from systematic measurement error. We modify the Chinn–Ito variable and replicate two studies (Brooks and Kurtz 2007; Chwieroth 2007) to demonstrate that our improved measure overturns some prior findings. Some political variables have stronger effects on capital account policy than previously recognized, while macroeconomic fundamentals are less important than previous research suggests.

Egypt: Financial openness index: The latest value from 2021 is -0.166 index points, unchanged from -0.166 index points in 2020. In comparison, the world average is 0.322 index points, based on data from 176 countries. Historically, the average for Egypt from 1970 to 2021 is -0.487 index points. The minimum value, -1.931 index points, was reached in 1970 while the maximum of 2.299 index points was recorded in 2001.