International Finance and the Developing World : The Next Twenty Years

In August 1986, the year after UNU-WIDER began its work, the Institute hosted a conference to honour the memory of Carlos Díaz-Alejandro. Nearly 20 years on it is instructive to look over the resulting conference volume, Debt, Stabilization and Development (Calvo et al. 1989) to see how the world has, and has not, moved on. The book contains much discussion of whether a truly global market in capital has emerged, as well as the real effects of capital flows on developing countries – both areas of major debate today. Latin America’s deepening debt crisis and the effects of the ‘first generation’ of reform programmes then underway across the developing world also featured. The terminology of ‘emerging economies’ was not yet common coin (the first retail fund for emerging markets did not list on the New York Stock Exchange until 1987), and the major global macroeconomic imbalance was between the USA and Japan (not China). Moreover, the acceleration in financial globalization via the new information technologies was only just beginning; Raj Kumar and Joseph Stiglitz (1989: 442) in their paper on sources of technological divergence between developed and developing economies write of ‘greater talk about computers in Silicon Valley’