ABSTRACT
The amount of private capital flowing into the “emerging markets” of the developing world exploded in the early 1990s, rising from $44 billion at the beginning of the decade to an all-time high of $244 billion in 1996 (in current dollars), according to the World Bank. 1 Meanwhile, during the first half of the 1990s, spending on official development assistance fell by more than a quarter in the face of large government budget deficits in donor countries and declining political support for aid. 2 The shrinking public presence and expanding private flows dramatically changed the complexion of North-South development finance. Whereas in 1990 less than half the international capital moving into the developing world came from private sources, by 1996 this share had risen to 86 percent. 3
