This book traces the roots of global financial integration in the first “modern” era of globalization, from 1880 to 1913. It analyzes the direction, destinations, and origins of international financial flows in order to determine the domestic policy choices that either attracted or deterred such flows to developing countries. The authors dispel the idea that the gold standard and other institutional arrangements were the key to attracting foreign investment, pointing to the stability and probity of political systems as much more important. One of their major conclusions is that the successful management of international financial integration depends primarily on broad institutional and political factors, as well as on financial policies, rather than simply opening or closing individual economies to the international winds. The Making of Global Finance 1880–1913 can serve as a valuable tool for current policy dilemmas, providing historical data to show which policies led to enhanced international financing for development in the past. It also includes historical data that will interest all scholars of economics and economic history, as well as the casual reader.
