Developing Countries & Foreign Capital

From the Paper:

"A basic policy question facing the leaders and economic ministers of emerging countries is the degree to which they should open their economies to the international financial system. By opening themselves to global capital markets, these countries can borrow development capital that would otherwise have to be squeezed as savings out of their domestic economies--economies in which average income is already low and severe poverty often widespread. On the other hand, by opening their economies to foreign capital, developing countries inevitably cede some control of their economic fate to the lenders of that capital.

The risks of doing so are both economic and political. While financial liberalization can bring in more development capital, that capital may surge away again, or become more..."

More papers on Developing Countries & Foreign Capital:

• Essay # 61332 : "Multinational Enterprises and Developing Countries"
• Essay # 66959 : "Growth and Modernization in Developing Countries"
• Research Paper # 66212 : "Least Developed Countries"
• Research Paper # 63747 : "Foreign Direct Investment and Global Trends"

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