Financial Liberalization in Developing Countries

Higher real interest rates increase financial intermediation, which in turn raises the rate of economic growth in developing countries. The Policy, Planning. and Research Complex distributes PPR Working Papers to disseminate the findings of work in progress and to encourage the exchange of ideas among Bank staff and aU others interested in development issues. These papers carry the names of the authors, reflect only their views, and should be used and cited accordingly. The ftndings, interpretations, and conclusions are the authors'own. They should not be attributed to theWorld Bank, its Board of Direaors, its management, or any of its membercounuies. Pu bl ic Di sc lo su r