Restrictive effects of external capital on development
Visualization of narrower problems
Incidence
The former centrally planned economies of Central and Eastern European have found foreign capital inflows in their various forms to be a mixed blessing, threatening the macroeconomic balance that they have recent achieved. These countries have learned that it is not easy to continue to attract foreign capital and simultaneously to reduce its adverse effects on inflation, the exchange rate and the current account, and to contain disturbances resulting from reversals of the flows.
Claim
A consistent system of money flow from sources outside a country or community creates the attitude that development can only begin to take place at the administrative level. When government funded improvements stop short of completion, a community may simply stand still, the people generally assuming that they can do nothing. Convinced that delay is inevitable, due to constantly shifting priorities which are largely beyond their control, they prefer to wait for the government to continue improvements rather than seeing the viability of alternative routes and pursuing them.
Narrower
Aggravates
Aggravated by
Type
(F) Fuzzy exceptional problems