Foreign Lending Revisited 1880-1980

What can the historical precedents tell us about the conditions under which international capital market flows can be mobilized on a large scale for purposes of economic development? The relevance of this question is self-evident: the surplus available for international lending and investment is largely in the hands of the private sector, and official lending appears unlikely to increase on the scale required — as shown in Table 1, the volume of official development finance showed no increase between 1981 and 1986 (at 1985 prices and exchange rates). But the last attempt to utilise market finance on a large scale for developing countries, in the 1970s, ended in less than complete success.