THE two decades since the Second World War have witnessed all around the world an unprecedented interest in the economic development and prospects ofthe poor countries. This interest has encouraged a lively discussion ofthe determinants ofeconomic growth, producing a voluminous literature and putting its mark on national and international policies. In this preoccupation oftheoreticians and strategists, one of the most neglected subjects, in thought as well as in deed, has been the financial aspect of economic development. In fact, as is evidenced by the nature of recent development models-of abstract analysis as well as for actual planning-most theorizing on and implementation of development policies proceeds in terms of the real aspects of economic growth, and emphasizes the changes in real magnitudes. The discussions usually centre around such concepts as the rate of growth, real capital formation, capital-output coefficients and investment criteria. Even when people speak about "financing economic development"-a frequently discussed topic-the issues taken up are more often than not problems of taxation and foreign aid rather than the repercussions of monetary and financial policy on resource allocation and the interactions between the development of a financial superstructure and economic development.!