ABSTRACT
Since the early 1980s, when new financing from commercial banks to developing countries was sharply reduced, the international financial community has been uncertain about how to provide debtor countries — both low income and middle income — with the financing necessary to assure an adequate growth performance. The extent to which it is appropriate and feasible for private capital flows to meet these needs in the future, or for official assistance to substitute for these flows, is one issue at stake. Related problems are whether foreign direct investment and other types of private capital can (or should) be induced to replace bank lending, whether private and official flows should be linked to each other through policy conditionally, and how to improve the productivity of official assistance through better co-ordination among official donors and lenders. 1
