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?

The author presents a detailed analysis of the past performance of a large range of developing countries. They are used to examine the opportunities facing other countries in the 1990s. Analysis of the successes of the Newly Industrialising countries has always emphasized the important role of exports-a view reinforced by the problems faced by those countries who have pursued inward-looking strategies and by the impact of the debt crisis in the 1980s. The author shows how national policies have not simply responded to external opportunities, but have used them and adapted their own strategies to international conditions. She also demonstrates the increasing importance of financing constraints. The reduction in the availability of external finance and the restrictions on the type available places a serious limitation on the choice of trade policies and therefore on industrial and development strategies that can be pursued.