Liberalization vs. Integration difference, investment, anywhere, discount, understand

DarienHacker

I've been reading in SS12, reading #35 about liberalization and integration and I'm not sure if I understand the difference between the two.

This is probably a basic question, but what exactly is financial liberalization? I understand that an integrated market allows investment from anywhere and has a lower discount rate because the risk is the covariance with the world instead of the variance of its market returns.

I also understand that liberalization is a gradual process that is somewhat related to integration.

However, the entire reading is confusing because I don't understand the difference between the two terms. Can someone provide a clear definition?