Reaping The Full Benefits Of Trade And Investment For Development

This report reviews evidence of the benefits and challenges of trade and investment for development, drawing on experiences from economies in various parts of the world.

This report reviews evidence of the benefits and challenges of trade and investment for development, drawing on experiences from economies in various parts of the world.

Trade, investment, open trade, economic development, Korea, Mexico, ASEAN4, Chile.

This report reviews evidence of the benefits and challenges of trade and investment for development, drawing on experiences from economies in various parts of the world.

Financial globalization has increased dramatically over the past three decades, particularly for advanced economies, while emerging market and developing countries experienced more moderate increases. Divergences across countries stem from different capital control regimes, and factors such as institutional quality and domestic financial development. Although, in principle, financial globalization should enhance international risk sharing, reduce macroeconomic volatility, and foster economic growth, in practice its effects are less clear-cut. This paper envisages a gradual and orderly sequencing of external financial liberalization and complementary reforms in macroeconomic policy framework as essential components of a successful liberalization strategy.