Working Paper No. 16 - International Finance: Meeting the needs of people in developing countries

The paper underlines the role of international finance in growth and how it creates jobs, reduces poverty, and provides social services. However, financial flows appear to be unevenly distributed where poor countries largely rely on public and private sources of finance, especially with private financial flows. Foreign direct investment has shown to be the least volatile source of financial flows and minimizes potential recessions, unemployment, and social deprivation that other financial sources can cause. Therefore, the paper aims to provide a set of policies that suggest increasing development resources, stimulating private financial flows to developing countries, and reforming the international finance system.

This paper was written as an insight into the work of the World Commission on the Social Dimension of Globalization 2004 that aims to provide a fairer globalization for all.