Capital flows to the nonindustrial countries share three striking characteristics. First, the bulk, of these flows was in the form of debt, not equity; second, the loans were mostly to, or guaranteed by, debtor governments; and third, these debts were largely bank loans, not bonds. This paper...

This timely reader of seminal papers published by Palgrave on behalf of Comparative Economic Studies, examines how and why foreign banks enter emerging markets and the positive benefits they bring to the host countries.