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Chantalle LaFontant

Developing Leaders Through Graduate Education

Indiana University

Major:

Economics

Mentor:

Erica Chito-Childs, Ph.D.

Capital Account Liberalization and Reform in Developing Nations

Efforts to foster greater economic prosperity through capital account liberalization for developing countries in Africa have met with little success. The effectiveness of economic assistance to the developing countries of Africa is not only dependent on greater aid dollars, but also on greater improvement of the institutional infrastructure of these countries. Often capital liberalization policies infringe on the effective, autonomous creation of these structures. By examining the data on the developmental gains of Eastern Asia, China and India in contrast to the lack of progress made within Africa, there appears to be a correlation between the creation of better business opportunities for domestic and foreign investors through institutional reforms. The creation of a better economy involves a myriad of different factors, which involves creating investment opportunities, better asset management, and improved ability for banks to act as an effective intermediary between investors and savers for any measurable economic gains to occur.