Over the last fifteen years there have been dramatic increases in both private and public intervention in international trade. Traditional barriers to market-based trade such as commodity cartels and tariffs have been augmented by new developments such as the rise of regional trade blocs and the growth of intra-firm trade. This book argues that these changes are large and persistent enough to have an impact on total development performance, and on the performance of individual countries and individual sectors. It illustrates this with a wealth of theoretical arguments, empirical evidence and country studies.

Increasingly developing countries are required to use monetary policy to meet the challenges of both short-term stabilization and long-term adjustment. Their experience has not been encouraging, but whether this is because of the policies or because of the countries is unclear. These policies and mechanisms, and the monetary theory which underlies them, were developed for advanced economics; even the newly industrializing countries have only had active monetary intervention relatively recently. Now it is being used in the poorest countries. Most research and discussion of policy has started from the question of how to use the financial sector to make monetary policy more effective. "Monetary Policy in Developing Countries" goes beyond this to examine both monetary policy and the creation of a modern financial sector in the wider context of overall development. What do governments and analysts expect from monetary policy, and what type of financial sector can deliver this? Does such a structure exist in developing countries or can it be created? And what else can an effective financial sector contribute to the economy as a whole?