Although commercial banks have played an increasingly important role in providing capital to developing nations, many analysts argue that private financing poses risks both to borrowing nations and the stability of the international economic system. In response, Mr. DaCosta demonstrates that developing nations that adopt appropriate policies can gain substantially by drawing on private sources of capital. His analysis indicates that many criticisms of the role of commercial banks are unfounded and that debt problems in LDCs typically are related to inadequate reserve and external debt management policies in the borrowing countries themselves. Emphasizing that economic growth in LDCs often is constrained by balance-of-payment deficits, Mr. DaCosta shows that nations relying on private capital frequently experience higher-than-average growth rates and argues that the advantages of unconditional or untied aid generally outweigh the constraints imposed by the multilateral aid agencies. In conclusion, he outlines specific policies developing nations can adopt to reduce financial risk and, turning to the needs of the poorest of the LDCs, examines a variety of proposals aimed at increasing the flow of concessional assistance to those countries that cannot qualify for commercial bank funds.
Westview Replica Editions -- Introduction -- Theoretical Approaches to Growth and Development in Developing Countries -- The Historical Role of Financial Institutions in the Growth of Developing Nations -- The Current Need for External Financial Resources in Developing Countries -- Sources of External Finance to Developing Countries -- Banks as a Source of External Finance in Non-Oil LDCs -- The Contribution of International Banking to Growth in Non-Oil Developing Countries -- Some Criticisms of the Role of International Banks in Financing the Non-Oil LDCs -- The Importance of Appropriate Domestic Economic Policies in Complementing the Contribution of the International Banks -- The Financing Needs of the Least-Developed Countries -- Conclusion -- Appendix