Since the early 1980s there have been three big waves of capital flows to developing countries.
The first wave was to Latin American countries that liberalized trade and opened their markets in the wake of the 80s debt crisis. This wave ended in grief, with the Mexican crisis of 1995 and the delayed Argentine crisis of 2002.
The second wave was to southeast Asian economies in the mid 90s, when the Asian economic miracle was all the rage. This wave ended in grief, with the crisis of 1997-8.
The third wave was to eastern European economies in the middle years of this decade. This wave is ending in grief as we speak. ...
...there’s no striking evidence that capital flows have been a major source of economic success. [emphasis added]
Monday, November 09, 2009
Imperialism and finance capitalism
Krugman on Finance mythbusting, third world edition: