Looking back on it, it might seem surprising that there were not more pundits, highlighting the excessive nature of the flows and the domestic policymaking deficiencies of the recipient countries. But who would these pundits be?
Among the policy officials in the recipient countries, the flows (and the development of sophisticated financial sectors) were a sign of progress and modernity: who would want to express doubts about that? In academic circles, the dominant paradigm was “efficient markets” – who would be bold enough to question the outcome of the market?