Financialization and Development: our comments on Perry Mehrling’s blog (by Nicolas and Wolfgang)

Perry Mehrling has published a comment on UNCTAD’s 2015 Trade and Development Report, “Making the international financial architecture work for development“.

We agree with Mehrling that “the deep suspicion of financial development that is evident throughout the report might rather be considered part of the problem than part of the solution” and, as Mehrling is clearly aware of, monetary economies have to be closely monitored and managed by informed and wise fiscal and monetary policy. We add, however, that to create a monetary and financial infrastructure in developing countries, a reliable and strong state and legal infrastructure has to be created. It cannot be taken for granted, and to develop it is no small task. Maybe it is the deep suspicion of the state that has pervaded western economics for the past 40 years (for understandable reasons rooted in the cold war)  that has hindered development just as much as the deep suspicion of financial development that after the experience of 2008 understandably pervades the 2015 UNCTAD report.

Read Perry Mehrlings blog-entry here . To view our comments, scroll down to “Nicolas Hofer” and “moneymind” (Wolfgang).