Maniacal inflows of capital are matched by panicked outflows when perceptions change. Rampaging changes result in intense currency and equity volatility. The reality or fear of irrational contagion lead scholars, practitioners and policy makers to construe that something about free movement of capital is unfair. The result is that local problems escalate into continental crises. Errant firms take healthy ones with them, and the heavy collateral damage nearly collapses whole economies.
Private capital is double-edged.
A loan, governmental or institutional, has one advantage. It can be renegotiated, providing breathing space for the emerging country. Foreign investors can take their money out, without notice or recourse. Many view this as unacceptable. Sovereignty is threatened.