Mauritian growth experience since the mid-1970s. We show that arguments based on openness to trade and FDI are either misleading …

whether this pattern of capital flows has hurt growth in nonindustrial economies that export capital. Surprisingly, we find … that there is a positive correlation between current account balances and growth among nonindustrial countries, implying … that a reduced reliance on foreign capital is associated with higher growth. This result is weaker when we use panel data …