The Role of Regional Financial Institutions
journal contributionposted on 08.05.2006, 00:00 by Allan MeltzerAllan Meltzer
I found many points of agreement in Manuel Hind's background paper and a few differences. I regret his tendency to use developing countries as if it were a collective term, so that one size fits all. This becomes particularly difficult when he discusses opportunities to borrow. Implicitly, he treats China, that can borrow very large sums, at interest rates not much above the rates charged by the development banks, as on a par with Zimbabwe or Kenya. The problem with this approach is that it neglects the reason why some countries can borrow while others cannot.