This book deals with the 'what' and 'how' but primarily with 'why' globalization most often has negative outcomes for developing countries. It breaks new ground in approaching globalization not only as trade commodities, but also as trade in positional goods ('decommodified trade.')

This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.

This paper assesses the impact of information asymmetries on developing country financing and considers alternative techniques to reduce the adverse implications of such asymmetries. Following an introduction, Section II examines in general terms the role of information in financial markets and analyzes the incentive and risk sharing properties of alternative financial contracts. Information asymmetries which are present in domestic finance are more prevalent in international finance, in particular in developing country financing. Section III reviews measures aiming to resolve information asymmetries. Borrowing and creditor country regulations and policies, as well as innovative contractual agreements help to resolve a range of issues related to information asymmetries. However, despite their contribution, residual problems remain unresolved. The international financial institutions, and in particular the Fund, have an important role to play in alleviating information asymmetries.

The impact of globalization of financial markets is a highly debated topic, particularly in recent months when the issue of globalization and contagion of financial distress has become a focus of intense policy debate. The papers in this volume provide an up-to-date overview of the key issues in this debate. While most of the contributions were prepared after the initial outbreak of the current global turmoil and financial crisis, they identify the relative strengths of the risk diversification and risk transmission processes and examine the empirical evidence to date. The book considers the relative roles of banks, nonbank financial institutions and capital markets in both risk diversification and risk transmission. It then evaluates the current status of crisis resolution in a global context, and speculates where to go from here in terms of understanding, resolution, prevention and public policy.

The paper argues that the design of the international financial system should take into consideration three problems: financial market instability; basic macroeconomic and financial asymmetries which characterise the international economy; and the additional problems generated by the current globalization process. A distinction is drawn between systemic issues, and centre-periphery issues. Based on this distinction, the paper proposed a broad agenda which relates both to the organisational structure of international financial institutions, and the services provided by them.

Globalization and Development draws upon the experiences of the Latin American and Caribbean region to provide a multidimensional assessment of the globalization process from the perspective of developing countries. Based on a study by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), this book gives a historical overview of economic development in the region and presents both an economic and noneconomic agenda that addresses disparity, respects diversity, and fosters complementarity among regional, national, and international institutions. For orders originating outside of North America, please visit the World Bank website for a list of distributors and geographic discounts at http://publications.worldbank.org/howtoorder or e-mail [email protected].

The sharp realities of financial globalization become clear during crises, when winners and losers emerge. Crises usher in short- and long-term changes to the status quo, and everyone agrees that learning from crises is a top priority. The Evidence and Impact of Financial Globalization devotes separate articles to specific crises, the conditions that cause them, and the longstanding arrangements devised to address them. While other books and journal articles treat these subjects in isolation, this volume presents a wide-ranging, consistent, yet varied specificity. Substantial, authoritative, and useful, these articles provide material unavailable elsewhere. - Substantial articles by top scholars sets this volume apart from other information sources - Rapidly developing subjects will interest readers well into the future - Reader demand and lack of competitors underline the high value of these reference works