More Weekend Reading

If you've got the time after reading Michael Klein's speech, check out a new working paper from the Commission on Growth and Development called International Finance and Growth in Developing Countries: What Have We Learned? (Hat tip: Dani Rodrik) From the abstract:

...This survey discusses the policy framework in which financial globalization is most likely to prove beneficial for developing countries. The reforms developing countries need to carry out to make their economies safe for international asset trade are the same reforms they need to carry out to curtail the power of entrenched economic interests and liberate the economy’s productive potential.

And from the conclusion:

...policy makers in emerging markets have displayed a remarkable revealed preference for financial openness, and the trend is likely to continue (perhaps with occasional seizures when global economic conditions sour). Why? Domestic financial development is attractive from several perspectives—it promotes growth, can enhance welfare more generally, allows easier government borrowing, and eases the conduct of a domestically oriented monetary policy. Such domestic financial deepening, along with merchandise trade expansion, makes capital controls ever costlier to enforce. Furthermore, financial opening is likely to promote, through several channels, a more
competitive and resilient domestic financial system.