As the global economy lurches from plunge to rebound, key emerging markets are erecting defenses against future financial upheavals. Brazil and Taiwan have imposed new controls on cross-border fund flows, while other Asian and Latin American countries are considering similar moves.

"Countries are worried about the capital that's coming in," says Simon Johnson, former chief economist of the International Monetary Fund.

Especially in Asia, emerging markets have rebounded from the global downturn more quickly than the United States, Europe or Japan. Investors who sought safety in dollar-denominated assets one year ago now are rushing into countries such as South Korea or Brazil. For those smaller economies, however, the huge investment flows can:

•Drive currency values to export-crushing heights.

•Inflate domestic stock and property market bubbles.

•Destabilize economies by leaving as quickly as they arrive.

"It's almost like too much of a good thing," says Win Thin, senior currency strategist at Brown Bros. Harriman in New York.

Brazil last month imposed a 2% tax on foreign capital inflows, then added a separate 1.5% tax on American depositary receipts – foreign company shares that trade on U.S. markets – to discourage investors from switching their holdings in the domestic stock market to ADRs. The Brazilian real is up 41% against the dollar since March.

Taiwan earlier this month barred foreign investors from placing money in short-term time deposits, in a bid to prevent speculative "hot money" inflows. Among other countries eyeing controls: Indonesia, Russia and Kazakhstan.

The IMF typically discourages countries from adopting such measures. Dominique Strauss-Kahn, the fund's managing director, earlier this month told reporters the Brazilian controls were unlikely to be effective.

Economists such as Harvard University's Kenneth Rogoff say controls likely will succeed in the short term by at least slowing the pace of new investment and thus currency appreciation. "It's very smart what they're doing," he said of the Brazilians.

But investors find ways to minimize or evade controls, turning to offshore markets or derivatives. "It's not going to stop people investing. It's just a bit of friction," says Jerome Booth, head of research for Ashmore Investment Management in London.