The Next Great Globalization: How Disadvantaged Nations Can Harness Their Financial Systems to Get Rich

By Frederic S. Mishkin

Book Overview

Many prominent critics regard the international financial system as the dark side of globalization, threatening disadvantaged nations near and far. But in The Next Great Globalization, eminent economist Frederic Mishkin argues the opposite: that financial globalization today is essential for poor nations to become rich. Mishkin argues that an effectively managed financial globalization promises benefits on the scale of the hugely successful trade and information globalizations of the nineteenth and twentieth centuries. This financial revolution can lift developing nations out of squalor and increase the wealth and stability of emerging and industrialized nations alike. By presenting an unprecedented picture of the potential benefits of financial globalization, and by showing in clear and hard-headed terms how these gains can be realized, Mishkin provides a hopeful vision of the next phase of globalization.

Mishkin draws on historical examples to caution that mismanagement of financial globalization, often aided and abetted by rich elites, can wreak havoc in developing countries, but he uses these examples to demonstrate how better policies can help poor nations to open up their economies to the benefits of global investment. According to Mishkin, the international community must provide incentives for developing countries to establish effective property rights, banking regulations, accounting practices, and corporate governance--the institutions necessary to attract and manage global investment. And the West must be a partner in integrating the financial systems of rich and poor countries--to the benefit of both.

The Next Great Globalization makes the case that finance will be a driving force in the twenty-first-century economy, and demonstrates how this force can and should be shaped to the benefit of all, especially the disadvantaged nations most in need of growth and prosperity.

• Format: Paperback
• Language: English
• ISBN: 0691136416
• ISBN13: 9780691136417
• Release Date: January 2008
• Publisher: Princeton University Press
• Length: 320 Pages
• Weight: 1.05 lbs.
• Dimensions: 0.8" x 6.3" x 9.2"

Customer Reviews

Excellent stuff, well written and easy to understand

In his book Frederic Mishkin sets out quite convincingly how countries can increase their wealth by establishing financial systems which are transparent, well regulated and governed by the rule of law. First the author explains the conditions required for implementing a functioning financial system. Then Mishkin has a close look at the financial crises in Mexico, South Korea and Argentina and every single one of those is worthwhile reading because Mishkin explains in detail how the conditions for the financial crises came about, how the authorities reacted to it and how well they have been able to put these crises behind them. If Mishkin ever writes another edition of this book he should perhaps add a chapter for the USA. Even though it is not exactly an emerging economy it is a classic example of what can happen if any part of a financial sector is not comprehensively regulated. In the final three parts of this book the author discusses how financial globalization is best implemented. What Mishkin tells in his book is not exactly new. Most of it has been known for a while. But as long as there are countries who believe that wealth can be created without any of the necessary requirements listed in Mishkin's book, it should remain compulsory reading for everyone.

a GREAT book on a GREAT issue

As the final word, Mishkin says: "...the next great globalization should be financial. I hope this book provides some guidance on how it can be done right." It sure did. ------------------------------------------------------------------------------------------------ (Since my review is somewhat long, I'll present the outline first.) I've scrutinized the book with much care, and I'll write about the following reviews in sequence: I. Book's main issue II. The author's standpoint III. Book content summary IV. The writing style V. My personal view about globalization ------------------------------------------------------------------------------------------------ I. The issue of the book This book touches the grand topic of financial globalization, which is something important yet confusing to us ordinary people. Though the topic has a large audience, few writers dared to address it, since the picture of globalization is too big and complex for most to envision, to understand, to interpret. THEY ARE SIMPLY UNABLE TO HANDLE IT. Those who are interested in globalization - and especially financial globalization - have been waited a long time for someone who can really explain it for them. Mishkin didn't fail us. In a relatively short book, he outlined the whole structure of financial globalization with nations as the basic unit of study. I think this books is comparable to , in which the journalist Friedman painstaking drew the huge picture of globalization with vivid stories and anecdotes. He did make the whole thing come to live. And this book is different in nature. While Friedman strived to give us an INTUITIVE FEELING about globalization (even created a phrase to capture the elusive concept - "the flat world"), Mishkin tried to RATIONALLY ANALYZE it for us. While Friedman kept our mouth open APPERCIATING the effects of globalization, Mishkin keeps us thinking about HOW it works. While Friedman enabled us to ENVISION it, Mishkin enabled us to UNDERSTAND it. ------------------------------------------------------------------------------------------------ II. The author's standpoint Like most economists, Mishkin is strongly "pro-globalization", even when talking about the controversial - financial globalization. He believes that successful participation in the world capital market can give weak countries the chance to catch up with their rich brothers. He argues persuasively that financial liberation in a country is mostly about how to get the SYSTEM right. It is the institutional design that matters most, not the amount of capital in it. As he puts it, when the institutional structure is in good shape, the market can attract investment, allocate them to their most effective uses, and keep away from financial crises. As for the basic infrastructure of financial system, he mentions the following elements again and again: 1. Developing strong property rights. Lack of property right protection kills investment incentives. 2. An effecti

Get down in the trenches of 21st century globalizationm

Whilst Mishkin tells it like it is, you just may want to follow on with "EXTREME COMPETITION" by Fingar, and "THE WORLD IS FLAT," by Aronica and Ramdoo to get to the "what do I do tomorrow." Great book, Mishkin... readers, keep reading!