ABSTRACT
The purpose of the set of studies presented in this book has been to look at monetary policy and the development of the financial sector in developing countries from the point of view of the general development of economies. We may start from analysis of individual questions of effective policy implementation, or correct choice of policy, but we cannot accept the conclusions of what are effectively partial approaches as sufficient. The development of the financial sector into a modern financial system which will serve effectively the economic functions of transmission of funds, mobilisation and transfer of savings, and allocation of credit is clearly an appropriate long-term goal. But it is subject to two basic questions: is it an aim which requires, or which would benefit from, special government policy assistance, or will it happen as part of general development? And the question which must always be most important to an economist, of the choice of priorities: are the financial sectors in the type of country which we are studying in some sense more underdeveloped than other sectors? Is the need for a more developed financial sector greater or more pressing than a more developed agriculture, or industry, or commerce or education, or any other sector to the extent that whatever resources are available for development should be channelled preferentially to it?
