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Private Capital Flows and Development

The Role of National and International Policies

image of Private Capital Flows and Development

This paper considers the new forms and roles of private capital flows to developing countries in the 1990s and appropriate national and international policy responses to the problems and possibilities they create. Section 2 describes the growth of these flows in the 1990s, their role in development and some of their effects in recipient countries. Section 3 considers alternate capital account policies for developing countries. In section 4 the possibility of improved international arrangements is considered. Section 5 contains recommendations from the previous analysis.

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Recommendations

Private international capital flows have become such an important and potentially volatile element in developing countries' economies that their macroeconomic policy makers must acquire accurate and timely information as to their size and composition. The IMF should do all in its power to assist member countries with weak data on these flows to improve them.

English

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