1 Diskussionsbeitäge des Fachbeeichs Witschaftswissenschaft de Feien Univesität Belin Volkswitschaftliche Reihe 2008/3 The Lucas Paadox and the Quality of Institutions: Then and Now Moitz Schulaick und Thomas M. Stege
2 The Lucas Paadox and the Quality of Institutions: Then and Now Moitz Schulaick (Fee Univesity of Belin) * Thomas M. Stege (Univesity of Leizig and CESifo) ** Febuay 2008 In the fist ea of financial globalization ( ), global caital maket integation led to substantial net caital movements fom ich to oo economies. The histoical exeience stands in contast to the contemoay globalization whee goss caital mobility is equally high, but did not incite a substantial tansfe of savings fom ich to oo economies. Using data fo the histoical and moden eiods we extend Lucas (1990) oiginal model and show that diffeences in institutional quality between ich and oo counties can account fo the shaly divegent attens of intenational caital movements. Keywods: caital maket integation; financial globalization; economic histoy. JEL classification: F15; F21; F30; N10; N20; O11; O16 We ae gateful to Michael Clemens, Niall Feguson, Alan M. Taylo, Michael Klein, Angus Maddison, Chis Meissne, Sevket Pamuk, Mac Weidenmie and Jeffey Williamson fo shaing data o thoughts. All emaining mistakes ae ou own. * Fee Univesity of Belin, John-F.-Kennedy-Institute, Deatment of Economics. ** Coesonding autho: Univesity of Leizig, Institute of Theoetical Economics / Macoeconomics, Maschnestasse 31, D Leizig, Tel: +49-(0) , Fax: +49(0) ,
3 2 1. Intoduction Duing the fist ea of financial globalization between 1880 and 1914 intenational caital mobility was as high as today. The Feldstein-Hoioka (1980) test even suggests that caital movements wee highe in the histoical ea (Bayoumi, 1990; Eichengeen, 1990; Taylo, 1996; Jones and Obstfeld, 1997). Yet the attens of intenational caital flows diffe makedly between the two eiods of lagely unesticted caital mobility. Befoe WW1 caital flows wee edominantly one-diectional in the sense that caital flowed fom the ich coe economies in Euoe to the ooe eihey on a net basis. As a consequence, the ich cedito nations in the coe had built u substantial net foeign asset ositions of aound 20 ecent of thei aggegate GDP, and by 1914 foeign caital to outut atios aveaged moe than 100 ecent in develoing counties (Edelstein, 1982; Obstfeld and Taylo, 2004; Schulaick, 2006). In the contemoay globalization, goss caital mobility is equally high, but does not lead to substantial net caital flows between ich and oo economies. As a esult, the Lucas (1990) aadox of missing ich-oo caital flows is moe onounced than in the fist globalization. 1 In thei imotant study, Obstfeld and Taylo (2004,. 55) concluded that the contemoay financial globalization was chaacteized by divesification finance as oosed to develoment finance befoe WW1: Today s foeign asset distibution is much moe about asset swaing by ich counties divesification than it is about the accumulation of lage one-way ositions a citical comonent of the develoment ocess in ooe counties in standad textbook teatments. How can we account fo these diffeences between now and then? Why was caital maket integation befoe 1914 maked by massive net caital flows to oo economies while the contemoay globalization is chaacteized by divesification finance and limited net caital movements? In this ae, we aim to sketch a otential theoetical exlanation fo this henomenon along the lines of Lucas thinking about deteminants of ate of etun diffeentials between develoed and less develoed economies. In his seminal ae, Lucas (1990) agued that diffeences in the elative human caital endowments could be an 1 While Clemens and Williamson (2004) found that the wealth bias of financial investment was as stong befoe 1914, othe studies have questioned the obustness of this esult afte contolling fo outlies and ointed to a much less onounced wealth bias in intenational caital flows befoe WW1 (Obstfeld and Taylo, 2004; Schulaick, 2006). This also mios the ealie findings by Edelstein (1982) who had shown substantial net investment flows fom Euoe to oveseas aeas.
4 3 exlanation fo the absence of substantial net caital movements fom ich and oo counties duing the ost-ww2 eiod. In Lucas oiginal line of thought, hysical caital is comaably unoductive in oo counties because comlementay factos such as human caital ae missing. This esective can be efeed to as the unoductive caital view. The altenative osition, the caital maket failue view, stesses factos such as asymmetic infomation, distoting olicies, and unenfoceable oety ights. This stand of the liteatue highlights the quality of institutions such as the otection of ceditos and the enfocement of oety ights acoss intenational bodes as a necessay condition fo net investment flows and the buildu of sizeable net foeign asset ositions (Shleife, 2003). Recent emiical studies have ointed to the imotant contibution legal and olitical aangements made to develoment finance befoe 1913 by inceasing cedito otection and boowes willingness to ay (Feguson, 2003; Mitchene and Weidenmie, 2005a; Feguson and Schulaick, 2006). Weak institutions have also been made esonsible fo the aucity of ich-oo caital flows in the contemoay globalization. The coss-county study by Alfao et al. (2003) concluded that weak institutional quality was the most imotant vaiable fo exlaining the aucity of ich-oo caital flows between 1971 and Moe ecently Ju and Wei (2006) have shown how the quality of oety ights can be a cause fo the obseved aadoxes in global caital flows. The unoductive caital view and the caital maket failue view ae by no means mutually exclusive. We theefoe ask whethe a combination of these two aoaches is caable of exlaining the diffeent attens of intenational caital flows duing the two eas of financial globalization within a unified famewok. In a fist ste, we extend Lucas (1990) oiginal model to account fo the imact of institutional quality on ate of etun diffeentials between ich and oo counties. In a second ste, we evaluate the model using moden and histoical data to see what diffeence in the quality of institutions between ich and oo counties could exlain the obseved attens of caital flows. Finally, we check the lausibility of these esults against the available evidence on diffeentials in institutional quality between ich and oo counties in both eas of financial globalization. This execise shows that it is ossible to exlain why ich-oo caital movements ae negligible in moden times but wee substantial befoe WW1: we find a consideably highe ate of etun diffeential between ich and oo counties fo the histoical eiod than fo today.
5 4 2. An extended Lucas execise We stat by extending the oiginal Lucas (1990) famewok to incooate the effects of diffeences in institutional quality on ate of etun diffeentials between ich and oo counties. Lucas himself oosed that institutional factos could lay an imotant ole fo the aucity of caital flows fom ich to oo (1990,. 94/95): Until aound 1945, much of the Thid Wold was subject to Euoean-imosed legal and economic aangements, and had been so fo decades o even centuies. A Euoean lending to a boowe in India o the Dutch East Indies could exect his contact to be enfoced with exactly the same effectiveness and by exactly the same means as a contact with domestic boowes. Assume, following Lucas (1990), that the oduction technology is ( ) 1 α α γ Y = A hl K h, whee Y is final outut, A > 0,0 < α < 1, γ > 0 denote constant technology aametes, h is human caital e caita, L (unskilled) labo, K eesents the stock of hysical caital, and h γ catues a oduction extenality. Outut e effective labo, y: = Y/( hl), is given by y = Ak α h γ, whee k: = K/( hl). The cometitive and ivate ate of etun on caital may then be exessed as =, whee 0 μ 1 catues the α 1 γ μα Ak h degee of oety ights otection. By solving y = Ak α h γ fo k and lugging the esult into the evious exession fo the ate of etun, we get A y h 1/ α ( α 1)/ α γ / α = μα. Hence, the atio of the ate of etuns on caital in oo and ich counties may be exessed as follows: ( α 1)/ α γ / α ( α 1)/ α γ / α μ y h μ Y / L h h = = μ y h μ Y / L h h, (1) whee the subindex stands fo oo and fo ich. Equation (1) shows that the ate of etun diffeential, /, deends on the elative otection of oety ights, μ / μ, on elative outut e caita, ( Y / L)/( Y / L ), and on the elative stocks of human caital e caita, h / h. To evaluate the model we need infomation on the tems aeaing on the ight hand side. The baseline set of aametes is discussed in the next section. The human caital extenality aamete is set to γ = While Lucas (1990) uses γ = 0.36, Ciccone and
6 5 Pei (2006) have shown in the meantime that the standad estimates ae heavily uwad biased. Benhabib and Peli (1996) even use γ = 0.1. Since this aamete is had to secify with cetainty, we decided to let γ [0.15,0.2]. 3. Data souces and aamete secification: now and then With egad to the undelying data, we make a few adjustments to Lucas oiginal numeical execise. Fist, unlike Lucas we don t look at just two counties, the US and India, but use a boade samle of develoed and develoing counties. Fo the histoical and the moden eiod ou dataset coves 54 esectively 24 economies. Second, fo both eiods, we slit the samle into a ich and a oo half by classifying all counties as oo if thei GDP e caita is less than the samle mean. Finally, we aveage the elevant data acoss the ich and oo ats of the wold economy in 1913 and We use these aveages to constuct two atios fo elative human caital endowment and elative GDP e caita which we lug into the extended Lucas-model. The data fo the contemoay eiod come fom commonly used souces such as the Wold Develoment Indicato database (Wold Bank, 2005). Inflows of otfolio and equity caital ove GDP ae taken fom the Intenational Financial Statistics (IMF, 2005). Data on educational attainment (aveage yeas of schooling) as a oxy fo human caital endowments ae taken fom the udated Bao-Lee dataset (Bao and Lee, 2000). In total, we count obsevations fo 54 counties fo the contemoay eiod ( ) coveing a lage numbe of develoing and develoed counties. Ou analysis of the histoical eiod builds on thee ecently comiled datasets fo the fist ea of financial globalization (Obstfeld and Taylo, 2003; Clemens and Williamson, 2004; Feguson and Schulaick, 2006). Fom these datasets come all economic vaiables such as the human caital oxy (imay school enollment). Real GDP data come fom the seminal wok of Angus Maddison (Maddison 1995, 2001). Caital flow and foeign investment stock data ae taken fom the wok of Stone (1999) as well as Feis (1965) and Wooduff (1966). A detailed data aendix is available fom the authos on equest. In total, we have assembled data fo 24 counties ove coveing moe than 80 ecent of global GDP in Among the majo economies, the only lage county missing in the histoical samle is China fo which GDP seies do not exist. The histoical dataset comises of Euoean counties (Austia- Hungay, Denmak, Fance, Gemany, Geece, Italy, Noway, Potugal, Russia, Sain), Noth
7 6 Constucting aveage values fo the ich and the oo half of the wold esults in a slightly highe elative human caital endowment in the histoical eiod with oo-to-ich atios of 0.45 back then vesus 0.41 today. With egad to outut diffeentials, we wok with actual GDP e caita data fo the moden eiod which show a ich-to-oo GDP e caita atio of Howeve, this aoach is oblematic fo the histoical eiod as we know that substantial net caital movements between ich and oo haven taken lace duing the eiod. As these flows ae likely to have loweed the initial ga in outut e caita, we need to adjust outut e caita fo the effects of the caital tansfes. Two additional assumtions ae necessay. Fist, we follow Twomey (2000) and Schulaick (2006, table 2) by assuming that the stock of hysical caital in oo counties owned by foeign investos aveaged 100 ecent of GDP in develoing counties in Second, we assume a caital-outut atio of thee. On the basis of this infomation, we can calculate diffeences in GDP e caita between ich and oo counties unde the countefactual assumtion that no caital had flown fom ich to oo. 3 The calculation yields an oiginal ex-ante outut diffeential between oo and ich counties of We also esent ou simulations below with the ex-ost diffeences in GDP e caita of 0.36 to demonstate the imact of these countefactual assumtions. It is inheently difficult to quantify the diffeence in institutional quality between ich and oo economies. In this ae, we consequently abstain fom making diect assumtions, but look to the model to tell us what diffeentials could exlain the obseved attens of caital flows. Nonetheless, a few eliminay consideations ae helful. Fo the contemoay eiod, we can use data on oety ights and legal otection such as the Intenational Poety Rights Index, the oety ights index comiled by the Heitage Foundation and the quality of the legal system measued by the Intenational County Risk Guide. Desite diffeent souces and comilation methods, all these indicatos show that oety ights otection in the aveage develoing county is only about half as effective as in the OECD counties (IPRI, 2007; Heitage Foundation, 2006; Dolla, 2002). Ameican and Austalasian settle economies (Canada, USA, Austalia, New Zealand) as well as South Ameican (Agentina, Bazil, Chile, Mexico, Uuguay), Asian (Ceylon, India, Jaan) and Middle Easten (Egyt, Tukey/Ottoman Emie) economies. 3 A simila ocedue has been ecently alied in a histoical study focusing on the effect of caital movements and mass migation on wage diffeentials by Hatton and Williams (2006).
8 7 Fo the histoical eiod, thee ae no detailed county-by-county assessments of institutional quality that could seve as comaable signosts to aoximate the diffeences in institutional quality. Howeve, it is clea that on the eve of WW1, most of Asia and Afica was unde colonial ule by the Euoean owes. Euoean ule could have had an imact on contact enfocement by foeign investos as Lucas himself noted in the quote above. Did colonial status imove oety ights and legal otection fo foeign investos? Feguson and Schulaick (2006) have shown that county isk imlied by isk emia in the bond maket was 60 ecent lowe fo Bitish colonies than fo indeendent develoing counties afte contolling fo diffeences in economic develoment, debt levels and othe solvency indicatos. Moeove, this Emie Effect emained esent in a samle that included ich coe economies alongside oo colonies. In othe wods, afte contolling fo economic fundamentals and solvency indicatos, in the eyes of Bitish investos the esidual institutional and olitical isks in oo colonies wee actually lowe than in moe advanced economies such as the US, Fance o Gemany. Looking with Lucas at the US and India in the yea 1913 claifies the ictue. By 1913, the US wee the lagest and on a e caita basis among the ichest economies in the wold. India, howeve, was among the ooest ats of the Bitish Emie with a significant ublic debt buden and a eal e caita income of 12 ecent of the US. The county isk emium fo US govenment bonds in the yea 1913 was 52 basis oints ove Bitish Consols. Without fomal guaantees by the Bitish govenment, India s county isk emium as chaged by the intenational bond maket was two basis oints lowe than in the US 50 basis oints. The aveage of the less-develoed ats of the Bitish Emie (including many oo Afican colonies) was 46 basis oints. It seems theefoe likely that colonial status contibuted significantly to equalizing institutional and legal investment isks between ich and oo economies. As fo the othe ats of the develoing wold that wee not unde fomal colonial ule befoe WW1 such as Latin Ameica and Easten Euoe, the ecent liteatue agues that the Euoean owes and the US oliced and otected oety ights by way of an infomal imeialism (Kelly, 1998; Goetzmann and Ukhov, 2001). In aticula Mitchene and Weidenmie (2005a,b) show that militay essue and olitical contol wee an imotant and commonly used enfocement mechanism fo intenational debt tansactions in It seems lausible to assume that such inteventions and indiect olitical contol have loweed
9 8 soveeign isk and esulted in a highe elative degee of oety ights otection in the eihey than today. 4. Evaluating the extended Lucas model Using the aametes esented in table 1, we evaluate the model and lot the esulting ate of etun diffeentials ove the diffeent atios fo institutional quality in gah 1. Looking at the moden eiod, lowe GDP e caita in oo counties as imlied by m m m m ( Y / L )/( Y / L ) 0.25, togethe with diminishing etuns to caital ceates a ositive ate of etun diffeential. Yet, as Lucas agued befoe, weake human caital endowment educes the ate of etun diffeential. 4 Howeve, the new insight fom figue 1 is that in an extended Lucas famewok, i.e. accounting fo diffeences in oety ights otection, a ositive ate of etun diffeential between ich and oo economies aeas only if the diffeential in oety ights otection is at o above 0.6. Assuming the level of oety ights otection in the eihey is 60 ecent of the level develoed wold, ates of etun in the eihey would be a mee 11 ecent highe than in the coe. Given the magin of eo of ou aoximations in table 1, the esulting diffeential is hadly enough to conclude that ex ante ate of etun diffeentials in the contemoay wold economy ae lage enough to incite lage caital flows. If the ate of etun in the tyical ich county amounts to, say, 5 ecent, the ate of etun in the tyical oo county would be 5.55 ecent. In addition, the evidence on elative oety ights otection discussed above even indicates that the diffeential could have been lowe, maybe only aound In this case, the ate of etun diffeential between ich and oo economies ove the ast 25 yeas would have been a athe insignificant 2 ecent. A figue low enough to exlain the obseved aucity of caital flows fom ich to oo counties. 4 m m This esult is qualitatively simila to Lucas (1990,. 94). The eason is that we set h / h 0.41 m m m m m m wheeas Lucas emloys h / h 0.2. On the othe hand, Lucas sets ( Y / L )/( Y / L ) 0.067, wheeas m m m m we have ( Y / L )/( Y / L ) 0.25.
10 9 Table 1: Baseline set of aametes Technology α = 0.3; γ = Relative human caital a m m h h h / h 0.41; h / h 0.45 Relative GDP e caita a m m m m ( Y / L )/( Y / L ) 0.25 (moden eiod; actual) h h h h ( Y / L )/( Y / L ) 0.36 (histoical eiod; actual) h h h h ( Y / L )/( Y / L ) 0.31 (histoical eiod; countefactual) b (a) The undelying data set is descibed in section 3. (b) The constuction of the countefactual elative GDP e caita is descibed in a technical aendix available fom the authos. Evaluating (1) with data fo the histoical eiod, we ask the same question what assumtions we need to make fo elative oety ights otection to have sufficient incentives fo caital movements given the discussed diffeentials in outut and human caital h h h h endowment. The ga in (countefactual) e caita incomes, ( Y / L )/( Y / L ) 0.31, is somewhat smalle than in the contemoay eiod which deesses the ate of etun diffeential. Yet this effect is tamed by a highe elative human caital endowment of oo h h counties befoe WW1 than today, indicated by h / h This being said, the ate of etun diffeential could have been even lage if the imact of e-ww1 migation on human caital levels (Hatton and Williamson, 2006, Table 1; Feguson, 2003,. 11/12) was taken into account. In this case, thee ae easons to assume that the human caital oxy undeestimates the human caital endowment in oo counties befoe Figue 1 demonstates that stating fom a oety ights diffeential in the vicinity of 0.75 a substantial ex ante ate of etun diffeential aeas fo the histoical eiod. The ate of etun diffeential gows to almost 50 ecent as we move close towads the assumtion of equal institutional quality in ich and oo counties ( μ / μ = 1) which could have been the case unde colonial ule. Hence, even if tansaction costs and isk avesion ae taken into account, the ex ante ate of etun diffeential befoe 1914 was lage enough to exlain the obseved caital movements fom ich to oo duing that eiod. Inteestingly, using actual instead of countefactual data on e caita income yields a small ate of etun diffeential of only aound 1.04 (assuming γ = ) at high levels of elative institutional quality, i.e. assuming μ / μ = As thee wee no imediments to caital mobility duing the fist
11 10 ea of globalization, this could be an indication that caital movements had eliminated substantial ate of etun diffeentials by the end of the eiod. Summing u, with highe elative institutional quality in the eihey befoe 1914 than today, an extended Lucas model suggests a substantial ex ante ate of etun diffeential. While difficult to quantify ecisely, the assumtion of highe institutional standads caies a high lausibility in light of the evidence esented on the Emie Effect and infomal aangements that enhanced cedito otection. Fo instance, if we genealize the above examle of equal county isk emia fo the US and India befoe WW1, the esulting ex ante ate of etun diffeential between ich and oo counties in the fist ea of globalization eaches moe than 50 ecent. Assuming a not unealistic diffeential of 0.9 still yields a substantial ate of etun diffeential of 35 ecent high enough to incite substantial caital tansfes fom ich to oo befoe WW1 and hence exlain the diffeent attens of financial globalization then vs. now. Moden Peiod Histoical Peiod 1.5 Imlied ROR diffeentials g=0.15 g= Countefactual ROR diffeentials H"ex ante caital flows"l g= 0.15 g=0.2 g= g= Imlied ROR diffeentials m m m m Figue 1: Rate of etun diffeentials in esonse to elative oety ights. 4. Summay The makedly diffeent attens of intenational caital mobility duing the histoical and the moden ea can be exlained within an extended Lucas (1990) famewok that combines the unoductive caital and the caital maket failue views. Two assumtions ae citical: (1) the human caital extenality in both eiods is in the ange γ [0.15,0.2]; (2) the diffeential in institutional quality between ich and oo counties in the histoical eiod was consideably highe than today, ossibly aound 0.9. While diect evidence on this last
12 11 assumtion is limited, available data and naative histoical accounts make this seem lausible. In the light of the histoical exeience and the ate of etun imlications of an extended Lucas model, imovements in institutional quality ae a key econdition fo lage caital flows to develoing counties 5. Refeences Alfao, L., S. Kalemli-Ozcan and V. Volosovych (2003). Why doesn t caital flow fom ich to oo counties? An emiical investigation Havad Business School Woking Pae, No Bao, R. J. and J.-W. Lee (2000). Intenational Data on Educational Attainment: Udates and Imlications. CID Woking Pae No. 42. htt://www.cid.havad.edu/cidw/042.htm Bayoumi, T. (1990). Saving-Investment Coelations, IMF Staff Paes, 37, Benhabib, J. and R. Peli, Uniqueness and indeteminacy: On the dynamics of endogenous gowth, Jounal of Economic Theoy, 1994, 63, Ciccone, A. and G. Pei, Identifying Human-Caital Extenalities: Theoy with Alications, Review of Economic Studies, 2006, vol. 73, no. 2, Clemens, M. A. and J. Williamson (2004). "Wealth bias in the fist global caital maket boom, " Economic Jounal 114 (2): Cooe, R. (1982). The Gold Standad: Histoical Facts and Futue Posects. Booking Paes on Economic Activity, Vol. 1, David R. Dolla (2002), Institutions, Tade and Gowth, Jounal of Monetay Economics, Dataset. Eichengeen, B. (1990). Tends and Cycles in Foeign Lending. In: Caital Flows in the Wold Economy, H. Siebet (ed.), Tübingen, Moh-Siebeck.
13 12 Edelstein, M. (1982). Oveseas Investment in the Age of High Imeialism. New Yok, Columbia Univesity Pess. Feis, H. (1965). Euoe The Wold's Banke WW Noton, New Yok. Feldstein, M. S. and C. Y. Hoioka (1980). "Domestic Saving and Intenational Caital Flows." Economic Jounal 90: Feguson, N. and M. Schulaick (2006). "The Emie Effect: The Deteminants of County Risk in the Fist Ea of Financial Globalization." Jounal of Economic Histoy 66 (June): Feguson, N. (2003). Bitish Imeialism Revised: The Costs and Benefits of Anglobalization Develoment Reseach Institute Woking Pae Seies No. 2. Goetzmann, William N. and Andey Ukhov (2001), China and Wold Financial Makets Woking Pae, Financial Institutions Cente, Whaton Business School, Hatton, T. J. and J. G. Williamson (2006), What Detemines Immigation s Imact? Comaing Two Global Centuies, Woking Pae Havad Univesity. The Heitage Foundation, 2006 Index of Economic Feedom, Host, Alexanda (2007), Intenational Poety Rights Index 2007, Washington DC, Intenational Monetay Fund (2005), Intenational Financial Statistics. Electonic vesion, accessed via Reseach Time Seies Database (ReTIS 3.2) at Deutsche Bank Reseach. Jones, T. and M. Obstfeld, M. (1997). Saving, Investment, and Gold: A Reassessment of Histoical Cuent Account Data. NBER Woking Pae Dataset: htt://www.nbe.og/databases/jones-obstfeld/
14 13 Ju, J. and S.-J. Wei, A Solution to Two Paadoxes of Intenational Caital Flows, Intenational Monetay Fund, Woking Pae 06/178. Kelly, Tish, Ability and willingness to ay in the age of the Pax Bitannica , Exloations in Economic Histoy, 35 (1998), Lucas, R. (1990). "Why Doesn't Caital Flow Fom Rich to Poo Counties?" Ameican Economic Review 80: Maddison, A. (1995). The Wold Economy: A Millennial Pesective. Pais, OECD Maddison, A. (2001). The Wold Economy. A Millennial Pesective. Pais, OECD. Mitchene, K.J. and Weidenmie, M. (2005a), Emie, Public Goods, and the Roosevelt Coollay, Jounal of Economic Histoy 65 (3): Mitchene, K. J. and M. D. Weidenmie (2005b), Suesanctions and Soveeign Reayment, NBER Woking Pae Seies Woking Pae Obstfeld, M. and A. M. Taylo (2002). "Globalization and Caital Makets. NBER Woking Pae Seies Obstfeld, M. and A. M. Taylo (2003). "Soveeign Risk, Cedibility and the Gold Standad: vs " Economic Jounal 113: Obstfeld, M. and Alan M. Taylo (2004). Global caital makets: integation, cisis, and gowth. Cambidge, Cambidge Univesity Pess. Schulaick, M. (2006). A Tale of Two Globalizations : Caital Flows Fom Rich to Poo in Two Eas of Global Finance. Intenational Jounal of Finance and Economics 11 (4): Shleife, A., "Will the Soveeign Debt Maket Suvive" (Januay 2003). Ameican Economic Review, Paes and Poceedings, Vol. 93, No. 2
15 14 Stone, I. (1999). The Global Exot of Caital fom Geat Bitain. London, Macmillan. Taylo, A. M. (1996). Intenational Caital Mobility: The Saving-Investment Relationshi. NBER Woking Pae Twomey, M. J. (2000). A Centuy of Foeign Investment in the Thid Wold. London, Routledge. Wooduff, W. (1966). The Imact of Westen Man. London, Macmillan. Wold Bank (2005). Wold Develoment Indicatos. Washington, Wold Bank.
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