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Financial Liberalization: What Went Right,What …

THE Financial liberalization that took place in the developingcountries in the 1980s and 1990swas part of the general move toward giving marketsa greater role in development. It was also a reactionto several factors specific to finance: the costs, cor-ruption, and inefficiencies associated with usingfinance as an instrument of populist, state-led devel-opment; a desire for more Financial resources; citi-zens demands for better finance and lower implicittaxes and subsidies; and the pressures exerted onrepressed Financial systems by greater internationaltrade, travel, migration, and better Financial reforms went beyond the interestrate liberalization that had been recommended bythe so-called Washington Consensus.

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