Debt and Adjustment in the World Economy

The experience of many developing countries with the use of large inflows of commercial bank loans and offical development assistance in the 1970s and 1980s has manifested the continuous external vulnerability of their economies. This study provides a theoretical and empirical analysis of the international aspects of development finance, credit-rationing rules set by bank mangers and donor governments, together with uncoordinated macroeconomic policies in the industrialized world, which tend to create unstable and inadequate external financing conditions for the developing world. This study not only makes clear that a global framework is needed to assess the contribution of external financial resources for development, it provides one as well.