ABSTRACT
This chapter considers various new mechanisms/institutions that have been proposed for the 1980s to add to or support the operations of the private sector. A very important consideration in thinking about institutional alternatives is the extent to which they permit sufficient finance. Institutional changes and interventions of various sorts are partly directed towards changing the route, partly to changing the effects of use of a particular route. In a dynamic setting, when significant potential growth occurs in lending and borrowing, the potential increase may not be realized without institutional change. The dominance of the industrialized countries commercial banks in recycling was partly a reflection of the lack of institutional alternatives; the other routes were incapable of doing more than a limited amount. From the point of view of developing countries, perhaps the best mechanism for the transfer of resources is Official Development Assistance which takes the form of grants or loans on highly concessional terms.
